A bribery and financial misappropriation scandal uncovered by BJ Services Co. in its Asia Pacific region division has forced it to delay filing its fiscal year 2004 annual report. The oilfield services company has requested a 15-day filing extension from Securities and Exchange Commission that will extend the filing deadline to Dec. 29.

Company officials said they received information from a whistle-blower in October that an Asia Pacific Region controller had misappropriated company funds in fiscal 2001. After an investigation, the regional controller admitted to multiple misappropriations totaling $9 million during a 30-month period ended April 2002. He repaid the $9 million to the company and his employment was terminated.

The company said there is no indication that the internal control operating deficiencies that allowed the situation to occur in its Asia Pacific Region existed at any of its other regional divisions.

The misappropriated funds were recorded as an expense in its consolidated statement of operations in prior periods and, therefore, no restatement is required. As a result, BJ Services expects to record $9 million as “Other Income” for the quarter ending Dec. 31. The company also has expanded the scope of its review in order to investigate whether additional funds were misappropriated, but further adjustments to its financial statements are not expected to be significant.

However, during the course of the company’s Audit Committee investigation, the company also received additional whistle-blower allegations that illegal payments were being made to foreign officials in the Asia Pacific Region. A separate investigation has found that more than $1.5 million in bribes may have been made over several years.

“In light of the status of the Audit Committee’s investigation, we concluded that we could not timely file our 10-K. If it is determined that illegal payments were made, we will take all appropriate remedial action,” said Chairman Bill Stewart.

BJ Services Company is a leading provider of pressure pumping and other oilfield services to the petroleum industry.

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