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NEW YORK - Kmart Corp. is now investigating the way the company was managed under former chief executive Charles Conaway, and has suspended severance payments to several former executives, The Associated Press reports.
The severance pay suspension does not apply to Conaway, who resigned in March and received $4 million as part of his separation agreement, Kmart spokesman Michael Freitag said Thursday.
The investigation focuses on what the company called the "stewardship" of Kmart by members of its former management team. But Freitag declined comment on whether Conaway is among the executives under scrutiny, and would not disclose the problems being reviewed.
Kmart has been investigating its accounting methods for weeks, saying only that the inquiry relates to vendor payment and rebates, and general liability reserves. Further details of the accounting investigation will be included in Kmart's 10K annual financial statement filing, scheduled for release on May 15.
Both reviews were started because of an anonymous letter, claiming to be from employees, that Kmart received in January raising concerns about accounting irregularities and other issues.