SEC Charges Seattle-Area Company and Former CFO With Phony Accounting of  Infomercial Sales

Washington, D.C., Aug. 9, 2010 — The Securities and Exchange Commission today charged the former chief financial officer of a Seattle-area skin care retailer with fraudulently boosting earnings by reporting sales of anti-aging products promoted through Home Shopping Network infomercials while the products still sat unsold in the company’s warehouse. The agency also separately settled charges against the company and began administrative proceedings against the company’s outside auditors for professional misconduct.

The SEC alleges that Karl Redekopp, the former CFO of International Commercial Television Inc. (ICTV), turned millions of dollars of quarterly losses into profits by falsely accounting for ICTV’s sales of the Derma Wand, a skin care appliance that purports to reduce wrinkles and improve skin appearance. Redekopp fraudulently recognized revenue before the Home Shopping Network had actually sold or delivered the product to viewers. He also improperly recognized revenue before a free trial period offered by the company had expired, and failed to reverse revenue from products that had been returned. Redekopp’s misconduct caused the company to falsely report millions of dollars in excess revenue in 2007 and 2008.

MUMBAI: FMCG major, Marico, today announced the acquisition of the aesthetics business of Singapore-based Derma Rx Asia Pacific (Derma Rx), through its wholly-owned subsidiary, Kaya Limited.

This acquisition provides Kaya access to an advanced range of skin-care products and a strong sourcing network, including suppliers of products from developed nations, a press release issued here stated.

Marico, however, did not mention the acquisition amount. “With this acquisition, nearly 45 per cent of our skin-care solutions revenue would come from overseas,” Marico’s Chief of Finance, HR & Strategy, Milind Sarwate, said.

The deal envisages the acquisition by Derma Rx International Aesthetics, a wholly-owned subsidiary of Kaya Limited, of the IPRs relating to DermaRx’s business and the shares in wholly-owned subsidiaries of Derma Rx Asia Pacific Pte Ltd.

Derma Rx, operates three centres in Singapore and one in Kuala Lumpur and has a customer-base of about 37,000, generating a turnover of about Rs 50-crore.

Marico plans to introduce, over time, Derma Rx products into its range of offerings at Kaya clinics in India and the Middle-East, the release said.

“This would enable Kaya to increase its share of revenue, from sale of products, from the current level of about 13 per cent to over 20 per cent, the release said.

Derma Rx’s Founders Dr S K Tan and Ms Janifer Yeo, will continue to be engaged in the business for the next three-years, to facilitate the transition and provide Kaya, with the know-how and experience from their expertise in aesthetic solutions in a relatively more-evolved market, the release said.