Romars shareholders and investors have asked for an investigation of accusations made by a recent unknown group of presumably ex-employees, that Romar management mismanaged funds, mistreated employees, and inflated numbers and intentionally issued bad checks.
Los Angeles, CA (PRWEB) December 31, 2004 -- The management of The Romar Group, Inc., said today, We stand firm with Romar and its commitment to right size its operation in an effort to build a more productive and efficient business. Over the next four quarters, Romar will announce to the public certain plans to grow its businesses which could include overhead reduction, additional lay-offs or terminations of non-productive employees, salary cuts, ESOP and major projects on the horizon or on the books.
Romar recently experienced cash flow issues that caused problems for some of its employees and vows to make it right. Romars shareholders and investors have asked for an investigation of accusations made by a recent unknown group of presumably ex-employees, that Romar management mismanaged funds, mistreated employees, and inflated numbers and intentionally issued bad checks.
Preliminarily, the presumed ex-employee claims are grossly misstated, exaggerated and unfounded. Romars combined sales and interest for Romar US and Romar International are almost 100 million dollars. Romar operated business on very low margins, with hopes to increase its overall revenue and profits through its design studio, advertising/ marketing agency and off-shore production business.
Romars investigation also revealed that many of its ex-employees were involved in outside businesses that conflict with Romars business units and interests, although each employee signed confidentiality and non-competing agreements. Some ex-employees were operating their businesses while they worked at a Romar office; and collected higher than market salaries. It was also discovered that some of Romars managers possibly compelled staff to perform duties for their outside businesses, paid unauthorized vacation pay, theft of equipment, used Romar resources to manufacture products for their own benefit and created fictitious businesses and generated invoices while Romar paid for them.
Don Polk said, I am stunned to learn this. I trusted many of our employees gave them higher than market salaries and allowed them to run day to day operations". To add insult to injury, some of these people are part of the payback Romar scheme to distribute or circulate erroneous information."
These practices and other problems created a temporary set back for Romar. Romars accounting department was a separate unit of long time accountants located in Woodland Hills, California.
Romar accountants role has been to keep the books, issue payroll checks, pay vendors and suppliers and pay all applicable tax. Apparently, Romars accountants failed to pay a small portion of its payroll tax roughly 180,000 out of one million dollars. Consequently, through further accountant negligence of failed payments and penalties, a lien was place on Romars account at Manufacturers Bank unknown to Romars managers; and New Jersey accountants who handle the main financial business of Romars shareholders/ investors. After Romars accountants agreed to pay its tax, a surprise" lien was placed on Romars account at Manufacturers Bank which left Romar, who was already experiencing cash flow problems, with four of Romars Los Angeles accounts depleted. After payroll and expense checks were returned to employees from their banks, cashiers checks were issued.
If any current or ex-employee of Romar or companies where checks were cashed are owed monies and we can verify the information, we would be more than happy to make necessary arrangements to reimburse what we owe", said Gerry Pavo, accounting department.
Don Polk, President, Chief Executive Officer and majority shareholder says, Maybe this is an expensive but necessary lesson learned. I allowed complacency and took my eyes off one of our most hopeful and promising investments. I gave people management and decision making opportunities who were not ready. I also took my eyes off of my most important guidance counselor, my Lord Jesus Christ".
Romar is a unique organization and private. Maybe we are too private and should communicate better with out employees and the public, said Polk. Doing so with caution, for example, could help eliminate openings for slanderous statements by unknown sources.
Romar financed and finance its businesses mainly through private funding from its multi-millionaire shareholders. Romar shareholders/ investors will continue to support its businesses.
Please contact us at politicalaffairs@romargroup.com if you have questions or visit, www.romargroup.com. You may also contact Romars general counsel or labor attorney by request.
Contact: Linda Haithcox
213-621-4403
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