Dollar General Corporation's (DG-NYSE) stock continued to slide in heavy trading yesterday following Monday's announcement that it is investigating accounting irregularities and possible fraudulent behavior.
As a result, the Goodlettsville, Tenn.-based discount retailer has said that it will correct its financial statements for fiscal years 1998 -2000 and lower its previously reported earnings.
In two days, almost $2 billion of the corporation's capitalization evaporated as investors bailed out of the stock that fell from a close last Friday of $23.75 to $15.76 yesterday, a decline of more 33 percent.
A hint of Dollar General's troubles may have surfaced on Jan. 22 when it said that it would report fourth-quarter earnings below expectations partly because of a "higher shrink expense," a term generally associated with inventory that has been stolen or unaccounted for.
A month later, Dollar General's finance chief, Brian Burr, was replaced by James Hagan.
On April 5, Burr filed to sell 126,597 Dollar General shares that would, even at yesterday's closing price, yield an estimated $2 million.
Adding further to Dollar General's troubles are a number of class action lawsuits that allege that during the period of accounting irregularities, Dollar General insiders sold over two hundred million dollars worth of Dollar General common stock at artificially-inflated prices.
Based on the company's preliminary investigation, a reduction in the $1.81 aggregate earnings of about seven cents per share over the three-year period is expected.
Dollar General officials say that the restatements are not expected to have a material effect on future earnings which are forecast for operating earnings per share of 71 to 73 cents for the current fiscal year.
"This action is unprecedented in the history of our company and is certainly regrettable," Cal Turner, Dollar General chairman and chief executive, said in a statement.
"I am confident that our investigation of these matters will result in a thorough review of our previously released financial statements for each period and will also establish the leadership and processes that will prevent these accounting irregularities from recurring," he said.
Dollar General's annual meeting was originally scheduled to take place June 4, and its first quarter earnings report was scheduled for May 14.
Neither event has been rescheduled.
Dollar General's audit committee has hired the law firm of Dechert Price & Rhoads and the accounting firm of Arthur Andersen LLP to assist with its investigation.
Dollar General operates more than 5,000 stores in 25 states.

Clearly touched by the tributes, retiring Del. W.W. "Ted" Bennett paused to collect himself before thanking the Democratic Committee for its service award and several personal gifts.
But for Bennett, the Monday night emotional roller coaster had just begun.
Former supervisor William Coleman took the podium and told the crowd that they were there for a two-fold purpose: "To witness what we hope will be one of the shortest political retirements in recent history," and also to announce "that the people in this county and region are going to send our best and most experienced delegate back to Richmond next term."
Saying that the "people are speaking," Coleman told the retiring delegate, "Ted, it is not about you. It's about the people."
Describing the county as in a very vulnerable political, economic and social position, Coleman said that the county "can ill afford to send someone to Richmond armed with a .22 rifle when we need someone with a Sherman tank. We need our big gun, and that is Del. Ted Bennett, our tried and true friend and leader."
Coleman, South Boston Councilman Ed Owens, businessman Greg Poirier and educator Morris Bryant built the case for Bennett's re-entry into the 60th House seat race.
Owens said that it would be a travesty to send anyone to Richmond other than Bennett. "Please let the people's will be done," Owens said.
Poirier recognized Bennett's "strong leadership" and pledged himself to the campaign.
Bryant told the crowd that "Ted Bennett was responsible for the Governor's School," describing the school as "a beacon in this region for our boys and girls."
"You do not have to decide tonight," Coleman told Bennett.
Josephine Marshall, Halifax County Democratic Committee chairman, lauded Bennett's service to the community and region, adding her voice to the call, although she said that she was surprised by the turn of events.
Calling his supporters "these very kind people," Bennett nevertheless immediately responded to reporters' questions, saying that he would not re-enter the House race.
Bennett said that his family was a major factor in his decision not to run and that also coincided with his determination "not to have one of my final legacies be a split up of Halifax County" as the GOP-dominated redistricting process began. The veteran delegate said that he "simply was not willing to roll the dice on that.
"This county is a whole lot bigger than me," Bennett said.
Earlier, the Halifax delegate said that he had really wanted to seek another term. "I wanted to serve under a Democratic governor one more time," he said.
In closing, Bennett said, "All that I ask is to remember this county can't make it without you there as a party and as individuals. You absolutely have to be a counterpoint to the other side. Pick up the torch. Don't worry about the odds, just worry about your community and realize its needs ...."
Bennett served the 60th District in the House of Delegates from 1989 to 2001.
Convention Delegates
Earlier in the evening, Democrats named a slate of 18 to represent them at the 5th District Convention in Buckingham on May 26.
Delegates include: Frank William Adams, Anne Mildred E. Bailey, Joseph M. Bailey III, Christine J. Coleman, Linda T. Collier, Marian Davis, Todd Eakes, Carolyn F. Edmondson, Cyrus W. Ferguson, Josh F. Guill, Alice Henry, Janet Leatigaga, Josephine Marshall, Greg Poirier, Irving Ray Satterfield, Rosa Fay Hoskins Satterfield, Lewis S. Wilson and John Woody. Delma S. Canada was named as an alternate.

Two employees of the Strictly Hip Hop Music and Clothing store in the Centerville Shopping Center were arrested Monday on charges of counterfeiting merchandise.
Bryant O' Neal Fallen, 21, of Main Street in Halifax, and Karen Chandler, 18, of River Road in Halifax County, were arrested after authorities executed a search warrant Monday afternoon.
Bogus music cassettes, CDs, video cassettes and clothing were found and confiscated by the South Boston Police Department and the Virginia State Police, according to Lt. R. D. Loftis.
Fallen was charged with two felony counts of failing to show true manufacturing on approximately 500 audio cassettes and audio discs and failing to show true manufacturing on approximately 250 video cassettes.
He was also charged with a misdemeanor count of selling goods in the state of Virginia, without the consent of a registrant, a reproduction mark registered under Chapter 6.1 of Title 59.1.
Chandler was charged with two misdemeanor counts of selling CDs and video cassettes.
Strictly Hip Hop is owned by James D. Chandler of N. Ridge Street in Danville.
Lt. Loftis said the arrests resulted from an ongoing investigation that that had spanned several months.
Lt. Loftis, Sgt. B. K. Lovelace, Special Agent B. Stephens of the Virginia State Police and representatives of the music, movie and clothing industries conducted the investigation.
The investigation was triggered by a complaint filed by a local citizen, Loftis said.
The investigation is continuing.
Fallen is schedule to appear in Halifax County General District Court on May 7.
· Darrell Villines, 28, of Alton, was arrested yesterday by the South Boston police on charges of uttering bad checks.
Villines was charged with a felony count of issuing 10 bad checks totalling over $200 during a 90-day period, drawn on BB&T and made payable to the Amoco Food Shops on Seymour Drive and Huell Matthew Highway, and Chevron on Halifax Road.
He was also charged with four misdemeanor counts of issuing bad checks drawn from another account at Community National Bank and made payable to the stores mentioned above.
The alleged offenses occurred between August of last year and February of this year.
Villines is being held at Halifax Blue Ridge Jail under a $25,000 secured bond.
· A 47-year-old Halifax man was arrested Sunday by sheriff's deputies on a felony assault charge.
sheriff's deputies on a felony charge that he allegedly and illegally intended to dispose of a computer system,valued over $200 and owned and leased by ABC Computers/Thomas Woodrow Martinette.
Roach allegedly committed the offense on April 24.

An attorney who formerly practiced in Halifax County has been sentenced to three years in prison Monday for grand larceny/embezzlement.
Fifty-one year-old William Ralph Palmer Sr., who currently resides in Raleigh, had two additional counts of grand larceny/embezzlement dismissed during his March bench trail before Judge William N. Alexander II.
Judge Alexander suspended Palmer's entire three-year sentence, conditional on his good behavior for five years.
The court additionally ordered a two-year probationary period for Palmer, and that he maintain full-time employment.
Judge Alexander ordered Palmer to pay restitution to his victim within two years after accounts are final.
Other Court Cases
· David Thornton Rice, 44, of South Boston, was found guilty last week of possession with the intent to distribute marijuana, and two separate counts of possessing a firearm after having been convicted of a felony.
Rice is free on bond pending a presentence report due for the next term of court.
· Robert Michael Meadows, 32, of South Boston, had 12 months of his previolusly suspended prison sentence revoked Monday for earlier findings of guilt for two probation violations.
Judge William L. Wellons authorized work release for Meadows and extended Meadow's probation for one year upon his release from incarceration.

A proposed project to ease the parking congestion at the Carter Field ball complex was presented to Town Council Monday, before a scheduled budget work session.
The project would create landscaped parking for about 50 additional parking spaces next to the lower ball field, according to Town Manager Ted Daniel.
Preliminary plans call for about 3,100 cubic feet of fill dirt to accomplish the project, along with a storm water retention structure and landscaping to preserve some of the trees on the one-acre parcel.
The lot would be surface-treated with tar and gravel, Daniel continued. He estimated a bottom-line cost of $5,000 to $6,000 for the project.
Carter Field, owned by JPS Apparel, and long a mainstay in South Boston's Dixie Youth baseball program, has lacked sufficient parking space for some time.
The complex contains two ball fields, both of which are owned by JPS Apparel Corp. and a playground, owned since 1993 by the city, now the Town of South Boston.
Two lots adjacent to the lower ball field on Cedar Avenue have been owned by the town since 1994, as part of the playground acquisition by the town from JPS Apparel during a corporate transition.
J.R. Griffin, plant manager for JPS Apparel, told council members Monday that he had wanted to create more parking on the lots for some time, addressing safety issues resulting from the current congestion on streets near the complex.
Griffin also told council that he has been working with VDOT since 1996 to accommodate the widening of John Randolph Boulevard (Route 360). That project will take some of the driveway currently in use at the Carter Field complex.
An eight-foot high retaining wall with a chain link fence will separate the new highway lane from the ball fields, and along with the additional parking, will create a much nicer facility than what now exists, according to Griffin.
"It will be a win-win situation for everybody," Griffin said.
The proposed project, expected to take a year to complete, is scheduled for a public hearing before the South Boston Planning Commission on May 16.

Halifax County overcame a slow start by rallying for four runs in the top of the fifth inning to score a come-from-behind 4-3 win over Person High School Monday.
The win was the seventh straight win for the Comets and it upped the team's overall record to 12-1 for the season.
Halifax County, trailing 1-0 at the time, used two of its four hits in the game and three Person High errors to good advantage in the big fifth-inning rally.
Anna Lewis, who came in for Kristi Tuck at first base in the fourth inning, walked to kick off the inning.
Jennifer Roller, who came in for Erica Owen in the fourth inning, reached base on a Person High error to put two runners on the sacks for the Comets.
Starting pitcher Emily Pool popped up to third base for the first out of the inning.
Brandi Conner doubled to score Lewis and Roller to put the Comets up 2-1.
Felicia Sprattley, who came into the game at center field for Emily Stolzenthaler in the fourth inning, walked.
Lindsay Stolzenthaler reached base on an error. Conner was erased from the base paths on a play at the plate for the second out of the inning.
Sprattley scored on an error to make it a 3-1 game and a double by Best plated Stolzenthaler to put the Comets up 4-1.
The Rockets countered with two runs in the bottom of the fifth inning after the second and third players to step up to the plate in the inning reached base on an error.
Kristi Reaves singled to left field to drive in the two runners to make the score 4-3 and advanced to third base on a Comets error on the play.
The Rockets' Abby Miller singled to put two runners on the bases for Person High.
Lewis came to the mound to relieve Pool at that point and retired the next two batters to end the inning.
Person threatened to score in the bottom of the sixth inning when Amber Penick led off with a hit and threatened again in the bottom of the seventh inning when Reaves tripled to left field with one out.
But the Comets' defense held on both occasions to preserve the win.
The Rockets jumped on top early, gaining a 1-0 lead when Reaves led off the bottom of the first inning with a base hit and scored on a double by Jennifer Newsome.
Halifax County had only two hits and three base runners through the first four innings.
The two hits, back-to- back singles by Lindsay Stolzenthaler and Branda Best with two out in the top of the first inning, created a potential scoring opportunity for the Comets.
But the Comets stranded Stolzenthaler and Best when Jenny Armistead struck out to end the inning.
Halifax County got a runner on the base paths in the top of the fourth inning when Armistead reached base on a Person High error with two out.
However, the next batter, Joni Foster, struck out to end the inning, leaving Armistead stranded.

The Comets used two hurlers in the contest with Pool, the starter, allowing three runs, four hits and one walk in 4.1 innings of work.
Lewis came on in relief and allowed two hits.

Pool struck out three batters and Lewis fanned two batters.

Teasha Chakela Paniel, 22, of 1053 Riverdale Drive, South Boston, died April 29 in Halifax County.
Ms. Paniel was born in South Boston on May 5, 1978, the daughter of Jerry Stevenson Paniel and Ora King Paniel. She was a member of Memorial Baptist Church and was employed by Presto Products, Inc.
Survivors include her parents; two sisters, Katina Martin of South Boston and Tonya Paniel of Virginia Beach; her paternal grandmother, Ruth Paniel of South Boston; and one devoted brother-in-law, Leon Martin.
Funeral services for Ms. Paniel will be held May 3 at 2 p.m. at Memorial Baptist Church with the Rev. Richard A. Terry officiating. Burial will follow in the church cemetery.

The family is receiving friends at the home.

John Edward Ballou, 49, of 4103 Ball Park Loop, Halifax, died April 29 at Halifax Regional Hospital.
Mr. Ballou was born in Philadelphia, Pa. on January 25, 1952, the son of Robert Ballou and Lottie Wimbush Ballou and was married to Jennie Jones Ballou. He was a member of Mountain Grove Missionary Baptist Church.
Survivors include his wife; two children, Tania and Joey Ballou; three grandchildren; one brother and three sisters.
Funeral services for Mr. Ballou will be held May 3 at 2 p.m. at New Zion Baptist Church with the Rev. Willie N. Yancey conducting the service. Burial will follow in the church cemetery.

The family will receive friends at the home, and one hour prior to the service.

William 'Bill' Crews, 82, of 1159 Turkey Track Lane, Nathalie, died April 29 at Halifax Regional Hospital.
Mr. Crews was born in Halifax County on May 3, 1918, the son of the late Frank Crews and Ellen Davis Crews and was married to Louise Davis Crews. He was a member of New Second Buffalo Baptist Church.
Survivors include his wife; nine children, Lorine Davis and Lorenzo Davis, both of the home, Franceen C. Roman and Vernester Boyd, both of Nathalie, Herman Crews of South Boston, Jerelean Waller of Long Island, Ernest Crews of Woodbridge, James Crews of Silver Spring, Md. and Clara Tucker of Washington, D.C.; 23 grandchildren; 15 great-grandchildren; three sisters, Queenie Jennings of Hyattsville, Md., Margaret Barbour of Nathalie and Bessie Garner of Washington; three brothers, Johnson Crews, Ezekial Crews and Sammy Crews, all of Nathalie; three daughters-in-law, Jerelene Crews, Gladys Crews and Gloria Crews; four sons-in-law, Rev. Jesse Waller, Thomas Boyd, Edward Junior Tucker and Clarence Davis.
Funeral services for Mr. Crews will be held May 3 at 1 p.m. at New Shiloh Baptist Church in Nathalie with the Rev. William Yancey officiating. Burial will follow in the church cemetery.

The family is receiving friends at the home.