Gemstar-TV Guide, Leung in settlement

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NEW YORK (AFX) - The former chief financial officer of Gemstar-TV Guide International Inc. has dropped all claims for $8.4 million in compensation that the publisher of TV Guide magazine has been holding in a segregated account since the executive was forced out in a November 2002 corporate restructuring.

The company said in a Securities and Exchange Commission filing on Tuesday that the settlement with Elsie Ma Leung fully resolves pending arbitration claims of both parties.

As a result of the settlement, the liability Gemstar-TV Guide carries on its balance sheet of approximately $8.4 million of restructuring payments will be extinguished in its fiscal quarter ending June 30, the filing said.

Leung and former Chief Executive Henry C. Yuen were sued by the Securities and Exchange Commission in 2003 over an alleged scheme to inflate company revenue from March 2000 through September 2002 to meet certain financial targets. Leung settled with the SEC in February, agreeing to return $600,000 and pay $750,000 in civil penalties, regulators said.

Both Yuen and Leung were forced out of their posts in the fall of 2002 due to the scandal.

Regulators contend that Yuen's actions contributed to a windfall between 2000 and 2002 of at least $18.8 million in salary and bonuses, $14.6 million in exercised stock options, and more than $63.6 million in Gemstar stock sales.

Gemstar said the settlement announced Tuesday does not affect about $30.5 million still being arbitrated by Yuen and the company.

Since November 2002, Gemstar has restated or reversed certain license and ad revenues by $357 million, with more than $230 million stemming from transactions in the case.

In February 2004, Gemstar-TV Guide agreed to pay $67.5 million to settle lawsuits by shareholders who alleged they were misled by the company's accounting and financial practices. Four months later, the Los Angeles-based company agreed to pay a $10 million penalty to settle SEC allegations of revenue fraud but did not admit or deny the claims.