Lithia says refunded auto incentives probe ongoing
By Soyoung Kim
DETROIT, March 19 (Reuters) - U.S. car dealership group
Lithia Motors Inc (LAD.N: Quote, Profile, Research) has refunded $158,500 to automakers
after finding three of its stores had improperly reported auto
sales in order to take incentive money from the manufacturers,
the company said in filing with securities regulators.
Lithia, the No. 7 U.S. dealership group by sales volume,
also said its audit committee had hired a special counsel as
part of an ongoing review of “potential irregularities” in its
sales reporting.
The disclosure marks the most detail Lithia has provided
since disclosing on Feb. 20 that it was reviewing a potential
sales reporting problem.
Medford, Oregon-based Lithia said in a regulatory filing
with the U.S. Securities and Exchange Commission on Tuesday
that its investigation had turned up evidence some vehicle
sales were being reported at the end of a financial period even
though customers had not signed final sales documents.
The company said the impact of that “timing difference” on
its reported earnings could not yet be estimated, but said that
the number of transactions under scrutiny represented “a small
percentage” of overall sales.
“The investigation to date has not detected evidence that
senior management encouraged or knew about the irregularities,”
the company said in its filing. “However, the external
investigation continues to review data which could change these
conclusions.”
Lithia said that audits undertaken before it began its own
probe with the special counsel had prompted three of its stores
to rebate a total of $158,500 in incentive payments.
The company did not specify the automaker involved in the
payments or detail when the rebates had been improperly
booked. Continued…
