Pembroke, Bermuda; Exeter, N.H. - Tyco International Ltd. announced June 3 that L. Dennis Kozlowski has resigned as chairman and ceo and stepped down from the conglomerate's board of directors for "personal reasons."
Pembroke, Bermuda; Exeter, N.H. – Tyco International Ltd. announced June 3 that L. Dennis Kozlowski has resigned as chairman and ceo and stepped down from the conglomerate’s board of directors for “personal reasons.”
Mr. Kozlowski is reportedly being investigated by the New York District Attorney Robert Morganthau and a grand jury for possible sales tax evasion. No charges have been filed yet.
“The Manhattan County District Attorney’s Office is conducting a sales tax investigation of Mr. Kozlowski and others,” says Barbara Thompson, communications director for the District Attorney’s Office.
Following a request by Tyco’s board, John F. Fort agreed to assume Mr. Kozlowski’s primary executive responsibilities for an interim period, while a search for a permanent replacement is conducted. All operating units and staff will report via Mr. Fort.
The company adds that Mr. Fort has been associated with Tyco for more than 28 years. He served as chairman and ceo from 1982 until 1992, when he was succeeded by Mr. Kozslowski. For the past decade, Mr. Fort has been a Tyco board member. He is currently the board’s lead director, acting as the primary liaison between Tyco’s management and its outside directors.
In its June 3 statement, the board also reaffirmed its commitment to “monetize” CIT, Tyco’s financial services subsidiary. Anticipated revenue would be used to reduce the company’s debts.
“We plan to complete the IPO of CIT by the end of June,” says Mr. Fort. “Also, I fully support the evolution of the company’s long-term operating strategy to focus more on organic growth. We will continue with our plans to make return on capital a key part of our compensation system along with earnings growth and cash flow.”
Mr. Fort added that, “During his tenure, Dennis Kozlowski grew Tyco into a $36 billion manufacturer and service provider, operating in more than 100 countries. We wish him well, and thank him for his contributions. Looking forward, Tyco’s strong fundamental businesses and talented workforce position the company to continue to prosper in the years ahead.”
Mr. Kozlowski’s resignation also follows several profit warnings, declining Tyco stock values, and recently reversed plans to break the conglomerate into several separate businesses. The effort to sell CIT is apparently the only remnant of those plans.
Control Engineering Daily News Desk
Jim Montague, news editor
[email protected]
