S&P lowers Pall

Standard & Poor's said it downgraded Pall Corp.'s corporate credit rating to BBB from A- and the short-term credit rating to A-3 from A-2.

The ratings remain on CreditWatch, where they were placed with negative implications on July 20 following Pall's announcement that its audit committee began an inquiry into potential material understatements of income tax payments and tax provisions for certain periods dating back to the fiscal year ended July 31, 1999.

The downgrade follows the company's Aug. 2 disclosure that taxes payable could be in excess of $130 million, exclusive of interest and penalties, and that it may have one or more weaknesses in its controls over financial reporting, S&P said.

The downgrade also reflects the significance of the issue, the unreliability of previous financial statements, the risk of noncompliance with various lending agreements and uncertainty regarding the cause of the matter, the agency said.

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