Take-Two Interactive admitted Mon. that it had made mistakes on i...

Option Plans [and] did not maintain adequate control and compliance procedures for option grants and did not generate or maintain adequate or appropriate documentation of such grants,” the company said in an SEC filing. Its Compensation Committee also “abdicated its option granting responsibilities and permitted… Brant to control and dominate the granting process,” the company said, adding that April 1997-Aug. 2003, Brant “engaged in a pattern and practice of backdating options and during such period, a significant number of option grants appear to have been backdated.” But Take-Two said a board special committee that investigated the issue found “there has been no pattern or practice of backdating for option grants” since Aug. 2003. Take-Two’s auditors “may not be able to rely upon representations made by certain of the company’s past employees and past members of management as a result of conduct related to option granting activities,” it said. There’s “no evidence that the company’s current senior executive management,” including CEO Paul Eibeler and CFO Karl Winters, “engaged in any conduct raising concerns about the reliability of their representations to the company’s auditors,” it said. The evidence also “shows that none of them engaged in any misconduct with respect to the company’s option granting practices,” Take-Two said. It was also found that board members and ex-Compensation Committee members Oliver Grace and Robert Flug didn’t engage in “willful misconduct or other dishonest acts.” Take-Two had already said it must restate historical financial statements to record charges for compensation expense relating to certain past stock option grants. Therefore, all consolidated financial statements, earnings releases and similar communications issued by the company containing financial information 1997- April 2006 “should no longer be relied upon,” it said. The company and its current and former independent auditors are still reviewing the special committee’s report on stock option practices to determine the stock-based compensation charges and the related tax and accounting impact on the financial statements for the fiscal years ended Oct. 31, 1997-Oct. 31, 2006, it said. Take-Two plans to file “as soon as practicable” its 10-Q SEC report for the quarter ended July 31, 2006 and its 10-K for the year ended Oct. 31, 2006 with the SEC, it said. The company received a written staff determination letter Thurs. from Nasdaq, stating that Take-Two’s failure to file with the SEC for the past fiscal year “serves as an additional basis for delisting the company’s securities,” it said. But once the filings are made and Take-Two holds its combined 2005 and 2006 annual shareholders meeting, the company “believes that it will be in compliance” with listing requirements, it added.