<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): August 13, 1999
THE CRONOS GROUP
(Exact name of registrant as specified in its charter)
Luxembourg 0-24464 Not applicable
(State or other (Commission File No.) (IRS Employer I.D. No.)
jurisdiction of
incorporation
or organization)
16, Allee Marconi, Boite Postale 260,
L-2120 Luxembourg
(Address of principal executive offices)
Registrant's telephone number: 352 453145
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 4. Changes in Registrant's Certifying Accountant
(a) On August 13, 1999, the Registrant's independent auditors, Moore
Stephens, were notified of the Board of Directors' decision to
replace them. Under Luxembourg law and the Articles of
Incorporation of the Registrant, Moore Stephens was appointed for a
one year term at last year's annual shareholders' meeting, which
was held on October 29, 1998.
In the Audit Report to the Registrant's 1998 Consolidated Financial
Statements, Moore Stephens drew attention to the fact that the
Registrant was negotiating the refinancing of certain loans. Moore
Stephens advised that these conditions raised substantial doubt
that the Registrant would be able to continue as a going concern.
In the Audit Report to the Registrant's 1997 Consolidated Financial
Statements, Moore Stephens drew attention to the fact that the
Registrant was negotiating the refinancing of certain loans and was
not in compliance with the terms of an escrow agreement. Moore
Stephens advised that this and other factors raised substantial
doubt that the Registrant would be able to continue as a going
concern.
In addition, Moore Stephens drew attention to certain notes to the
Registrant's 1998 and 1997 Consolidated Financial Statements
relating to financing and recomposition expenses, items affecting
fourth quarter results of operations, commitments and contingencies
and related party transactions. Moore Stephens advised that
allegations had been made which could result in the Registrant
becoming defendants in lawsuits alleging various financial
improprieties in the operation of certain third party Austrian
investment entities and their sponsoring companies.
The decision to change accountants was approved by the Board of
Directors of the Registrant. The Board has an audit committee of
two members. One of the members of the audit committee participated
in the decision of the Board to replace Moore Stephens and approved
the decision; the other member was not present at the meeting of
the Board at which the decision to replace Moore Stephens was made
and did not participate in the decision.
During the Registrant's two most recent fiscal years, December 31,
1998 and 1997, and the subsequent interim period preceding such
replacement, there were no disagreements between Moore Stephens and
the Registrant regarding any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedures which would have caused Moore Stephens to make reference
to the subject matter of the disagreement in connection with its
report on the Registrant's financial statements.
During the Registrant's two most recent fiscal years, December 31,
1998 and 1997, internal controls existed to the extent that Moore
Stephens was not required to advise
<PAGE> 3
the Registrant that the internal controls necessary for the
Registrant to develop reliable financial statements did not exist.
No information came to Moore Stephens' attention that led it to no
longer be able to rely on management's representations, or
unwilling to associate with the Registrant's financial statements.
During the Registrant's two most recent fiscal years, December 31,
1998 and 1997, and the subsequent interim period preceding such
replacement, Moore Stephens has not advised the Registrant that
there has been a need to expand the scope of its audit, or that
information has come to its attention that if further investigated,
would materially impact the fairness or reliability of a
previously issued audit report or the underlying financial
statements; or cause Moore Stephens to be unwilling to rely on the
representations of the Registrant's management or be associated
with the Registrant's financial statements.
(b) On August 16, 1999, the Registrant engaged Deloitte & Touche LLP
("Deloitte & Touche") as the Registrant's independent auditors. The
decision is subject to approval by the shareholders of the
Registrant, which will be sought at the next annual meeting of
shareholders, to be held later this year. During the Registrant's
two most recent fiscal years, December 31, 1998 and 1997 and the
subsequent period prior to engaging Deloitte & Touche, the
Registrant had no consultations with Deloitte & Touche regarding
the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Registrant's financial
statements. No written reports were provided to the Registrant or
oral advice provided that Deloitte & Touche concluded was an
important factor considered by the Registrant in reaching a
decision as to an accounting, auditing or financial reporting
issue. In addition, there were no matters that were either the
subject of disagreement or a reportable event.
<PAGE> 4
SIGNATURES
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.
Date: August 20, 1999
THE CRONOS GROUP
By:
-------------------------------------
Dennis J. Tietz
Chief Executive Officer
