News

Take-Two CFO Out After Shareholder Coup

• By The Associated Press
• April 10, 2007

CFO Karl Winters' resignation took effect immediately. Take-Two named Lainie Goldstein, currently senior vice president of finance, as interim CFO while the company searches for a permanent replacement.

"Karl oversaw finance at Take-Two during challenging times for the company," CEO Ben Feder said in a statement. "I look forward to working closely with Lainie as we continue to address Take-Two's challenges aggressively and swiftly so that employees can focus on building the company's bright future."

Financial analysts have been anticipating the CFO's departure since a coup led by major stockholders Oppenheimer Funds and DE Shaw Valence Portfolios LLC, which together control nearly half of the company's shares.

The shareholder revolt followed poor results as well as accounting troubles and controversy surrounding the violent and sexual content of Take-Two's most popular line of games, "Grand Theft Auto."

At the company's annual shareholder meeting March 29 in New York, the investment firms elected new directors and stripped Paul Eibeler of his titles as CEO and president. He was replaced by Feder, formerly a senior executive at News Corp.

Earlier, Take-Two's former chairman and CEO, Ryan A. Brant, became the first chief executive to be convicted of backdating stock options, a practice that involves pegging stock options to favorable grant dates in the past to boost the recipients' award. In February, he pleaded guilty in a New York state court to first-degree falsification of business records in a deal that lets him avoid prison.

Take-Two disclosed last week it is under a formal investigation by the Securities and Exchange Commission over its stock-options practices.

Critics have blasted Take-Two's old management and board for ethical lapses and a lack of creativity, saying the company relies heavily on relatively uncreative sequels, sports games and bloodthirsty "first-person shooters."

Although so-called hardcore games remain popular with teens and young men, new online genres -- trivia quizzes, word games and multiplayer role-playing games -- are catching on with women, older players and millions of mobile phone users.

Child advocacy groups and legislators have also complained that the company produces the industry's most violent, mean-spirited games. One version of "Grand Theft Auto" included a hidden, lewd scene that sparked a 2005 congressional uproar.