5-3-2004 Report: Grand Jury to Probe Coke
NEW YORK - A federal probe of Coca-Cola Co. has intensified as a federal grand jury was scheduled and regulators subpoenaed employees, The Wall Street Journal said on Monday.
The U.S. attorney's office and the Securities and Exchange Commission are examining whether Coca-Cola overshipped drink concentrate to distributors in some markets including Japan -- called "channel-stuffing" -- thereby possibly inflating financial results.
Channel-stuffing refers to a legally murky practice in which a company convinces clients to accept unwanted or early deliveries of a product. It can be used to pad revenue and help a firm meet quarterly financial targets.
Rebates, extended payment terms and other incentives are often provided to clients in exchange for their complicity.
NEW YORK - A federal probe of Coca-Cola Co. has intensified as a federal grand jury was scheduled and regulators subpoenaed employees, The Wall Street Journal said on Monday.
The U.S. attorney's office and the Securities and Exchange Commission are examining whether Coca-Cola overshipped drink concentrate to distributors in some markets including Japan -- called "channel-stuffing" -- thereby possibly inflating financial results.
Channel-stuffing refers to a legally murky practice in which a company convinces clients to accept unwanted or early deliveries of a product. It can be used to pad revenue and help a firm meet quarterly financial targets.
Rebates, extended payment terms and other incentives are often provided to clients in exchange for their complicity.
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