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By | Kat Hall 30th December 2014 11:47

US tech titan CSC slapped with $190m penalty

Three-year probe by US regulator closes

IT giant CSC has been slapped with a $190m (£122m) penalty by US regulator the Securities and Exchange Commission following a probe into the firm's accounting practices.

The investigation was opened in 2011, mainly into the firm's European outsourcing unit - including revenue from its troubled NHS contract negotiations between 2009-2012.

The company had previously acknowledged errors in its accounting in the Nordic region, Australia, and its NHS contract, said the SEC.

CSC intends to restate its financial statements for the years 2012, 2011 and 2010, according to the SEC filing.

The outsourcing giant had been locked into battle with the NHS over its exclusive rights to be the only provider of clinical IT systems in the North, Midlands and East of England. That right was removed in 2012, with the firm having also written off $1.5bn (£966m) of its NHS investment.

"As part of the restatement, the company will revise those assumptions based upon uncertainty with respect to a range of possible final outcomes under the NHS contract," said the SEC filing.

Around $130m (£84m) of operating profit will no longer be recognised in company's prior fiscal years, said the SEC.

The company will record a pre-tax charge of approximately $200m (£129m) for the SEC penalty and related expenses in its third quarter of 2015.

In November CSC's second quarter revenue fell by 3.4 per cent to $3.08bn (£1.98bn) as "transformation efforts" took hold at the IT giant.

CSC has approximately 74,000 employees and reported revenue of $12.9bn (£8.3bn) for the 12 months ended 3 October 2014. ®

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