United Rentals board says CFO failed to perform duties

United Rentals announced July 14 its board of directors has determined John Milne, the company’s president and chief financial officer, failed to perform his duties and could be terminated if the failure is not remedied in accordance with his employment agreement.

In August of last year United Rentals announced the Securities and Exchange Commission was conducting a non-public, fact-finding inquiry of the company. The SEC notice stated the inquiry does not mean it has concluded the company broke the law.

A committee of the board of directors reviewing matters relating to the SEC inquiry recommended the action regarding Milne after he informed the committee he was not willing at the time to respond to its questions. The board notified Milne he would be afforded the thirty-day cure period provided by his employment agreement.

The committee is also analyzing several short-term, equipment sale-leaseback transactions that occurred in 2000, 2001 and 2002 and resulted in the company reporting aggregate gross profit of $12.5 million, $20.2 million and $1.5 million, respectively. The company says that although no final conclusion has been reached, the committee has information suggesting the accounting for some of the transactions was incorrect. The SEC inquiry relates to a range of the company’s accounting practices and is not confined to a specific period.