Peregrine Systems Notified of Nasdaq Intent to Delist

Peregrine is in violation of a Nasdaq rule after auditor Arthur Andersen said the company's financial statements for 2000, 2001and the first three quarters of fiscal 2002 should not be relied upon.

San Diego-based Peregrine fired Arthur Andersen as its auditor April 2 and fired its replacement auditor, KPMG, at the end of May. KPMG sent the SEC a letter alleging possible fraud at the company.

KPMG had found that, beginning in 2000, Peregrine apparently overstated revenue by about $100 million.

In turn, KPMG was fired after Peregrine learned that $35 million of the disputed revenue had stemmed from Peregrine's earlier business transactions with KPMG's consulting arm.

Peregrine may stay the delisting process by requesting a hearing before a Nasdaq Listing Qualifications Panel. Peregrine says it will seek to retain its listing during the audit process being undertaken by its new accountants, PricewaterhouseCoopers.

In early Thursday trading, Peregrine shares were down 28 cents, or 33 percent, at 55 cents.

Separately, Peregrine Systems says it closed the sale of its Supply Chain Enablement business to Golden Gate Capital for about $35 million excluding transaction costs.

The company announced the sale on June 13 as part of its plan to strengthen its financial position and focus on its Infrastructure Management market.

On June 18, the company says it planned to cut its work force by 48 percent to about 1,500 from 2,900 after it divests itself of its Supply Chain Enablement business.

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