PeopleSoft admits 'pumping up' results

A top PeopleSoft executive has admitted the company tried to pump up earnings in the second quarter of 2003.

Oracle attorneys argued later the move was a ploy to make PeopleSoft seem more profitable than it really was.

Kevin Parker, PeopleSoft's co-president and CFO, acknowledged in testimony in Delaware Chancery Court that PeopleSoft "had asked certain customers to accelerate their deals" to avoid what otherwise could have been an embarrassing quarter for the company.

In addition, documents shown in court suggested that prior to Oracle's hostile takeover bid, PeopleSoft's internal income projection for 2004 was 69 cents per share. Soon after the bid was launched in June 2003, the figure was updated to 94 cents per share - something that PeopleSoft maintains was an honest overestimate of the combined "synergies" from a deal to acquire JD Edwards.

Parker was testifying under cross-examination in a Delaware court case filed by Oracle to eliminate PeopleSoft's so-called poison pill defences, which are designed to thwart a hostile takeover.

Attorneys for the larger software company hope that Wednesday's court session will show that PeopleSoft's management does not have a lot of credibility when rejecting Oracle's $21 per share bid for the company.

Declan McCullagh writes for News.com