Groupon replaces 2 directors

Associated Press + More

By The Associated Press, Associated Press

CHICAGO (AP) — Online deals company Groupon Inc. said Monday that it will replace two board members with executives from American Express Co. and accounting firm Deloitte LLP.

The company said Daniel Henry, chief financial officer of American Express and Robert Bass, a vice chairman at financial consulting firm Deloitte, will sit on Groupon's audit committee.

Henry was appointed to the board on April 26, and replaces Starbucks CEO Howard Schultz.

The move comes as Groupon faces growing scrutiny over its accounting practices. In March, the company restated its quarterly financial results, explaining that it lost more than it initially reported because it had to pay out more refunds than expected.

Its auditor, Ernst & Young, flagged a weakness in the company's internal controls. The company is working to hire more financial staff to help address its problems.

Bass will stand for election at the annual shareholders' meeting June 19 after he retires from Deloitte. He replaces entrepreneur and investor Kevin Efrusy.

"With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward," said Eric Lefkofsky, Groupon's chairman.

Henry, 62, has been CFO of American Express since 2007. Bass, also 62, has been a vice chairman of Deloitte since 2006, and a partner there since 1982. He is retiring from Deloitte on June 2.

Groupon shares fell $1.27, or 10.6 percent, to close at $10.71. In aftermarket trading the stock rose 22 cents, or 2 percent, to $10.93.

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