AREMISSOFT WORKING WITH SEC OVER BULGARIA PROBE

Views on BG | August 1, 2001, Wednesday // 00:00

NEW YORK, July 31 (Reuters) - Software maker AremisSoft Corp. (NASDAQ:AREM), the focus of recent media reports that questioned the value of some of its contracts, on Tuesday said it was cooperating with the Securities and Exchange Commission over the SEC's investigation into the company's contract with Bulgaria's National Health Insurance Fund.
It also said it had hired independent auditors, PKF, in connection with the investigation to review the payments that the company had received in 2000. PKF has been able to confirm that the AremisSoft received $1.7 million from the contract, but is still seeking additional information to confirm that the company received an additional $5.4 million, recognized as revenue by AremisSoft in 2000, the company said.
Questions over the value of the company's Bulgarian contract have led to legal wrangling between AremisSoft and some media outlets and hedge fund firms. In July, it filed a lawsuit against online financial news site TheStreet.com (NASDAQ:TSCM) and several hedge-fund management firms it said had conspired to drive down its stock price.
The legal action followed a series of articles by TheStreet that called into question the value of contracts AremisSoft had signed to supply its software to various government and health-care agencies in Bulgaria.
AremisSoft also said that it was making a slew of management changes and warned that its second quarter results will fall ``substantially short'' of Wall Street's estimates. The management changes and PKF's special review will delay the filing of its second quarter results, which were expected this week, it said.
Analysts on average had been expecting the company to post second quarter earnings of between 26 cents and 27 cents a share with a consensus estimate of 26 cents a share, according to Thomson Financial/First Call.
The company said it had appointed its co-chief executive, Roys Poyiadjis, as chairman and chief executive officer, replacing Lycourgos Kyprianou, who is retiring.
Kyprianou has accepted a position as founding chairman of the company.
It also said that David Latzke will be taking over chief financial officer, replacing Michael Tymvios, who has resigned for health reasons.
It also said that Paul Bloom, recently appointed President of the US Group, will become president and chief operating officer.
AremisSoft's shares have been halted since early Monday pending an announcement. On Friday they closed at $11.19, up from a year low of $8.75, but below its high of $28.25.

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