Interactive TV software vendor pulls guidance

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One of the leaders in interactive television software Liberate Technologies has placed its chief operating officer on leave following the revelation that the company has serious problems with its accounting.

Liberate said that it had discovered facts that "call into question" the timing and propriety of $10 million in revenue it recognised in fiscal 2002 and the first fiscal quarter of 2003. It added that it was investigating additional transactions. In mid-October, the company announced it had found questionable revenue totaling $1.84 million and said it would restate results.

The company - whose biggest shareholder is Oracle - also reported that it has placed COO Donald Fitzpatrick on leave until the acccounting probe is complete and that it was withdrawing is revenue and earnings guidance for future quarters.

It admitted pro forma revenue for its current fiscal second quarter ending in November would be "materially below" its prior $15 million to $20 million guidance, with a pro forma loss per share "materially greater" than its prior 12 cent to 16 cent view.

The latest twist follows the decision in August by Chairman and CEO Mitchell Kertzman to give up the office of CEO to company president Coleman Sisson. It also named a new chief financial officer at that time who then cut revenue guidance for the fiscal first quarter by nearly half amid steeper losses because of weak spending by cable and telecom companies.

The company is also facing delisting from the Nasdaq because of the delayed filing of its financial information during the restatement process.

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