IPG considering rebates

Embattled Interpublic Group, which is racing to meet a September 30 deadline to restate four years of financial results, is considering returning media rebates for up to the last five years, sources tell Media. Although media rebates are an acceptable practice in several Asia-Pacific markets, sources said the initiative showed IPG was working to err on the side of caution as part of a house-cleaning exercise to meet new standards in accounting practices. "At the moment the rebates took place, there was nothing wrong with them, but where (IPG) is now going, it wants to make these practices the rule rather than the exception," said a source, adding that the group was looking at every world market where the issue exists. When contacted, IPG issued a statement, saying: "We are moving to a higher level of disclosure and transparency as relates to all facets in our business." With a healthy cash balance of US$1.5 billion, sources say the world's third largest advertising group will comfortably cover the planned refunds. It has also been noted that New York-based IPG has worked out repayment amounts and schedules with clients. "(The rebate) really surprised me - this is going to set a new level of transparency. They want to be so squeaky clean in this," an industry source added. The move appears to have caught rival agencies Media contacted for comment by surprise. Said a rival agency source: "We feel comfortable with our numbers. I don't know the scale of the issue to be able to say whether this is an IPG-only issue or whether it could cast a pall on the industry." In earlier reports, IPG announced that it was on course to meet the September 30 deadline to restate four years' worth of financial results due to errors in its accounting of revenue and acquisition. In recent days, IPG has lost its bid to stop a shareholder proposing the sale of the company, although the group dismissed a break-up scenario, saying it was committed to enhancing shareholder value.