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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 30, 1999
AMERICAN BANKNOTE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
1-3410 13-0460520
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(Commission File Number) (I.R.S. Employer Identification
No.)
410 PARK AVENUE, NEW YORK, N.Y. 10022-4407
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(Address of Principal Executive Office) (Zip Code)
(212) 593-5700
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 4. Changes in Registrant's Certifying Accountant.
Attached as Exhibit 16.1 hereto is the letter from Deloitte &
Touche LLP ("D&T") relating to the Registrant's Form 8-K dated December
30, 1999. With respect to paragraph 7 of D&T's letter relating to the
relationship that involved the $1.5 million consulting fee, the Special
Committee concluded that the relationship did not involve a violation of
the Foreign Corrupt Practices Act but that the accounting for the fee
that the Registrant paid to the consultant may need to be restated to
conform with generally accepted accounting principles.
ITEM 5. Other Events.
The Registrant has been advised by the United States Attorney's
Office for the Southern District of New York that it is a target of an
investigation relating to the revenue recognition issues involving its
former subsidiary, American Bank Note Holographics, Inc. In addition,
the Registrant has been advised by the staff of the Securities
and Exchange Commission that it is prepared to recommend to the
Commission that enforcement proceedings be commenced against the
Registrant in United States District Court seeking injunctive relief and
monetary disgorgement. The staff also advised the Registrant that the
subject matter of the proposed enforcement action relates to the revenue
recognition issues involving Holographics.
The Registrant was advised recently by counsel to Morris Weissman,
the Registrant's Chairman of the Board and Chief Executive Officer, that
such counsel had received similar notification from the United States
Attorney's Office for the Southern District of New York and the staff of
the Securities and Exchange Commission with respect to Mr. Weissman. In light
of this development, the Registrant's Board of Directors is considering a
change in Mr. Weissman's duties at the Registrant.
Item 7. Financial Statements and Exhibits
(c) The following exhibits are filed with this report:
Exhibit Number Description
16.1 Letter of D&T dated January 18, 2000
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
AMERICAN BANKNOTE CORPORATION
By: s/Patrick J. Gentile
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Patrick J. Gentile
Senior Vice President Finance
Date: January 20, 2000
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Exhibit 16.1
[LETTERHEAD DELOITTE & TOUCHE LLP]
Deloitte & Touche LLP Telephone: (212) 436-2000
Two World Trade Center Facsimile: (212) 436-5000
New York, New York 10281-1414
January 18, 2000
Securities and Exchange Commission
Mail Stop 11-3
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read Item 4 of Form 8-K of American Banknote Corporation (the
"Registrant") dated January 7, 2000 and with the following clarifications
agree with the comments made.
1. On December 30, 1999, we advised the Registrant and the Chairman of the
Registrant's Audit Committee both in writing and orally that the client-
auditor relationship between Deloitte & Touche LLP and the Registrant
had ceased.
2. The Deloitte Touche Tohmatsu member firms in Brazil and France agreed
to remain as the local statutory auditor of the Registrant's
subsidiaries in those foreign jurisdictions and another Deloitte Touche
Tohmatsu member firm is presently considering whether they would be
willing to serve as the local statutory auditor in other foreign
jurisdiction.
3. On December 30, 1999, we orally advised the Registrant and the Chairman
of the Registrant's Audit Committee that since the investigations by (i)
the Special Committee, formed by the Registrant's Board of Directors to
supervise the Board's consideration of the potential revenue recognition
issues being investigated by the Audit Committee of American Banknote
Holographics, Inc. ("Holographics"), a former wholly-owned subsidiary
sold effective July 20, 1998, in a public offering of Holographic's
shares, and (ii) the Audit Committee, relating to a letter agreement to
pay a $1.5 million consulting fee, as discussed further in this letter,
were ongoing, we were uncertain as to whether we would be willing to
continue to rely on the representations of the Registrant's management.
4. We do not have sufficient information to agree or disagree with the
Registrant's assertion that, as of December 30, 1999, it had requested
access to financial information relating to the restated financial
statements for review by the Special Committee's counsel; no such
request had been brought to our attention. We have been informed,
however, that by letter dated January 3, 2000, the Registrant's Senior
Vice President Finance requested certain information from Holographics.
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January 18, 2000
Securities and Exchange Commission
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5. We do not have sufficient information to agree or disagree with the
Registrant's assertion that, as of December 30, 1999, the Special
Committee's counsel had requested the opportunity to interview former
employees.
6. In December 1997, the Registrant's wholly owned subsidiary,
Holographics, recorded approximately $6.9 million of sales pursuant to
its supply agreement with a customer (the "Customer"). Holographics
subcontracted the manufacture of holograms related to the Customer sale
to a third party (the "Subcontractor"). On March 5 and 9, 1998, we
informed the Registrant and the Chairman of the Registrant's Audit
Committee, respectively, that we had a disagreement regarding the audit
scope relating to the manufacture and delivery of holograms by the
Subcontractor. This disagreement, which was resolved to our
satisfaction, was also reported in writing to the Audit Committee by
letter dated June 18, 1998.
7. On May 3, 1999, we orally advised the Registrant that a January 8, 1998
letter agreement to pay a United Kingdom-based entity $1.5 million "...to
act as a consultant for the express purpose of procuring a banknote
reorder from [a foreign governmental entity], as well as, stock
certificates, checks, and other security products within the country",
which fee for "service...is not contingent upon achieving success",
raised concerns including but not limited to potential violations of the
Foreign Corrupt Practices Act. We requested that the Registrant inform
its Audit Committee of this concern and that the Audit Committee retain
counsel to thoroughly investigate this transaction. On June 11, 1999,
the Registrant and the Chairman of the Registrant's Audit Committee
informed us that counsel had been retained to investigate this
transaction. The investigation relating to this transaction has not yet
been concluded and is currently ongoing. However, on December 29, 1999,
PricewaterhouseCoopers LLP advised us that it had concluded that the
Registrant should have accrued all or a portion of this fee its 1997
consolidated financial statements.
Yours truly,
S\ Deloitte & Touche LLP
