Dell Caught Green-Handed?

Did troubled computer maker Dell accept then hide
kickbacks from Intel designed to buy loyalty to
the giant chipmaker? Those are the claims in an investor lawsuit
naming founder Michael Dell and former CEO Kevin Rollins, among others.

The lawsuit, filed Wednesday in Austin, Texas, U.S. District Court by
the William Lerach law firm, is on behalf of Dell shareholders that
bought company stock between February 2003 and Sept. 2006.

Dell reportedly accepted up to $1 billion in “secret and likely
illegal” e-Cap (exception to corporate average pricing) payments to
cut its expenses, the lawsuit alleges.

According to the newspaper, the lawsuit claims the payments had
“direct, material impact” on Dell’s reported profits. Only 15
upper managers at the computer maker knew of the rebates, an
arrangement Intel insisted upon to avoid antitrust questions.

In 2005
rival AMD sued Intel, pointing to the rebates
Intel pays companies.

“We received the lawsuit and are analyzing it,” Dell spokesperson
Dwayne Cox told internetnews.com. Beyond that, the computer
maker had no comment.

The legal claim names a total of 16 defendants, including Dell, Intel
and PricewaterhouseCoopers, the computer maker’s accounting firm.

Intel and PricewaterhouseCoopers were not immediately available for
comment.

The lawsuit follows last year’s word by Dell its accounting
practices were the focus of an investigation by the Securities
and Exchange Commission.

The lawsuit is just the latest hurdle Dell faces as it attempts
to regain its top spot in PC sales.

Earlier this week, founder
Michael Dell took the CEO reins back from Rollins, in hopes of
righting a company faced with government investigations,
disappointing financial numbers and a changing computer industry.

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