Clarent revises outlook; execs placed on leave

Internet telephony equipment maker Clarent today announced that its previously reported first-quarter and second-quarter revenues for 2001 could have been “materially overstated” and placed three executives on administrative leave as a result.

The company expects to find reduced Q1 and Q2 revenues and increased related net losses. Clarent also expects related period balance sheets also to be adjusted—in specific, a “material reduction in cash and increase in other assets as of June 30.” As a result, Clarent believes fiscal 2001 and fiscal 2002 revenues will be well below anticipated levels.

The Redwood City, Calif.-based company’s board of directors has formed a committee to investigate the transactions that place Clarent’s quarterly results in question. The auditing firm of Ernst & Young will help conduct the investigation.

The board has placed the following Clarent employees on administrative leave: Jerry Chang, chief strategist; Matthew Chiang, president of Clarent’s Asia/Pacific region; and Kevin Chang, general manager for the company’s Northern Asia operations.

Frank Lee, president of Clarent’s China operations, has been named acting head of Asia/Pacific operations. The board also plans to name President and CEO Michael Vargo acting chairman of the board.

--Amalia Parthenios, staff writer