IBM finds improper hardware sales in Japan unit

IBM Corp. reduced its full year revenue figure for its Global Services unit by US$260 million after discovering improper sales of third-party hardware at its Japan unit, the company said in a filing with the U.S. Securities and Exchange Commission (SEC) on Thursday.

The company said that a review of agreements for sales of third-party hardware in Japan that was conducted after it announced full-year earnings on Jan. 18 discovered “certain IBM Japan employees acted improperly and inconsistently with IBM’s policies and practices.” A spokeswoman for IBM Asia-Pacific declined to provide additional information when contacted on Friday.

Fourth quarter results already reflected a US$50 million adjustment and so full-year figures have been adjusted down by a further US$210 million, the SEC filing said.

IBM’s global services division is the largest of its businesses and contributed US$46.4 billion, or about 48 per cent, of IBM’s total 2004 revenue of US$96.5 billion. The US$260 million reduction represents 0.2 per cent of this total revenue.