L&H dismisses disgraced head of South Korean arm

Troubled speech recognition company Lernout & Hauspie (L&H) tonight banned its suspended South Korean boss from its offices and relieved him of his duties.

South Korean operations were at the heart of a scandal which made the one-time darling of the Belgian high-tech market subject to European US security regulators' investigation and brought the threat of court action from shareholders. Joo Chul Seo was suspended by L&H only hours before Belgian investment company FLV Fund alleged that a bank account it had set up in Korea to finance start-up operations had been misused by Seo. FLV alleged that the bank account had been 'collaterised in favour' of Seo. FLV is itself the subject of an investigation by Easdaq and its shares have been suspended. L&H plans to restate its earnings for the two previous years. Auditor KPMG said stated earnings could not be relied on. The company ran into trouble in August this year when the Wall Street Journal highlighted discrepancies in reporting of its Korean sales. Amid a background of falling sales, the company claimed that Korean revenues had jumped over 600 per cent in a year. Both L&H and FLV have seen their shares fall from high double figures to low single ones.