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Gizmondo Parent's Accountants Resign Over Lack Of Investigation
by Simon Carless [PC, Console/PC]
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July 21, 2006
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In the continuing saga regarding handheld game company Gizmondo, which collapsed under massive debts earlier this year, parent company Tiger Telematics' accountants have resigned due to lack of funds and the failure of an investigation into former executives' possible defrauding of the company.
According to an SEC filing on the matter, accountancy firm Goldstein Golub Kessler LLP resigned due to "the company's inability to complete its investigation of certain former officers and directors due to a lack of funds", as well as "questions about management integrity... lack of a current engagement letter", and "amounts outstanding to GGK", implying that the company had also not been paid for its services.
Though Gizmondo Europe itself is under liquidation, with debts running into the tens of millions of dollars or higher, parent company Tiger Telematics is still officially trading, but its is unclear whether it can continue to operate, or, indeed, which of the Gizmondo-related patents and game rights it might own, if any.
Having launched lavishly, doubt mounted about the success of the Gizmondo handheld throughout 2005, a situation which climaxed in the resignation of senior executives after "significant recent controversy over Gizmondo's financial performance and significant financial perks to company directors" revealed by Gamasutra and others in the press.
Following that, ex-Gizmondo executives Stefan Eriksson and Carl Freer were infamously arrested in Los Angeles after Eriksson crashed a $1 million Ferrari which, it transpires, was not permitted to leave the United Kingdom and was still owned by a bank. Further charges resulted, although none have additionally surfaced that are directly related to Gizmondo's financial performance itself.
In any case, Goldstein Golub Kessler's letter reveals that Tiger Telematics' "...internal investigation based on certain information that was made public concerning the Company and some of its former officers and directors commenced in 2005."
But, it's explained: "We understand that the investigation resulted from matters published in various newspaper articles and on websites... We have been told that the investigation is currently unable to be completed due to a lack of funds and it is unknown if the investigation will ever be completed."
However, though Tiger Telematics itself is not investigating what happened at Gizmondo, it appears that the UK-based Gizmondo liquidators are still investigating the collapse of the handheld firm itself, so more information may be forthcoming from them in the future as they attempt to recover money due to creditors. It is also unclear what further action U.S. and UK authorities may be taking into the matter, as Eriksson and Freer await trial.
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