Editorial: IPG not in the clear, even after accounting probe

Six years after US financial watchdogs threatened to put a rocket up Interpublic for sloppy accounting, the investigation has fizzled out like a damp squib.

IPG has been ordered to pay a $12 million penalty (hardly a fortune by big-business standards), while two former senior executives have been fined a total of $100,000 (not exactly a punitive amount) for their part in the affair.

Maybe, in settling with IPG, the US Securities and Exchange Commission thinks the group has already suffered enough. Certainly, the slipshod practices going on in some of the European offices of IPG's McCann Erickson has cost IPG millions of dollars in accountant and lawyer fees.

In truth, though, IPG's indiscretions look like small beer when set against the magnitude of other matters on the SEC's agenda. Indeed, it's debatable whether it would have taken such an interest had the scandal not surfaced at a time of post-Enron financial purity in corporate America.

Where this leaves IPG is anybody's guess. The best that can be said of the settlement with the SEC is that it's one less problem to worry about.

Michael Roth, the chairman and chief executive, has stopped the ship from sinking, but it remains becalmed. Healthy margins are proving elusive to hit, the share price remains in the doldrums and the economic climate offers little hope of improvement. Moreover, with his background in law and accountancy, Roth can never hope to be a new-business magnet of the kind epitomised by some of his rivals. Onlookers believe he simply has too many problems holding him down and is burdened by too much overhead.

There's a feeling that something needs to be done. But what? The options remain the same as when Roth was appointed to the thankless job in 2004 - take IPG private, undertake a disposal programme or sell the whole thing.

Prevailing financial conditions would make the latter difficult, although there is speculation that IPG could be next on Vincent Bollore's shopping list if the Havas chairman snares Aegis. If Roth has a cunning plan, shareholders and staff alike are doubtless eager to know what it is.