Washington, DC, January 12, 2006--The Securities and Exchange Commission has opened an informal investigation into charges that Home Depot Inc., inflated profits through supplier payments meant to cover the cost of damaged merchandise, the New York Post reported on Thursday.
The top home improvement retail chain is accused of inappropriately using so-called "return-to-vendor charges" by overbilling suppliers for goods damaged during shipping, the newspaper said.
Responding, Home Depot called the to the allegations "simply not true." In a brief response to a New York Post article, the company acknowledged that it cooperated "several months ago" with an informal inquiry from the Securities and Exchange Commission about its return-to-vendor policies. Those refer to how retailers get compensated for damaged goods from vendors.
The Post article claimed that Home Depot inflated charges, which would thus pad its income. Home Depot said in the statement, "Our internal financial controls related to vendor policies preclude any potential for a material adverse impact on the company.”
