Penguin chief `didn't know about scandal'
City sceptical about chief executive's explanation for book company's pounds 100m loss
Speaking after his return to New York following a six-week holiday in South-east Asia, Mr Mayer said the accounting scheme was in no way sanctioned by him and that he was only told of the problem a few days ago.
"I had no knowledge of it. I was really shocked and dismayed when I heard about it. There were quite a few controls in place between the level at which this happened and my position. Clearly those controls didn't work and we need to find out why."
Asked whether, as chief executive, he should have been aware of a six- year scheme in which book retailers were given discounts for early payment, he said: "It is a difficult question to answer. Obviously as chief executive you are responsible for the business so the answer is `yes' to part of the question.
"But is there any way a CEO could have known when so many financial people, who had this as their only job, did not know either?"
Mr Mayer said he had had no direct contact with the woman responsible for the scheme who had worked for Penguin for around 16 years. "I know her name but I had no direct contact with her at all. As to why she did it, I haven't a clue. It's a strange story. It would appear there was a degree of zeal there that was not appropriate."
Mr Mayer said he was happy to help Pearson and auditor Price Waterhouse with their inquiries but had not yet been asked. "I would welcome the opportunity to help, of course. I am more than interested to know the detail."
Mr Mayer said he first heard of the "black hole" in Penguin's accounts when he was telephoned in Hanoi by Michael Lynton, the new chief executive of Penguin USA. He was initially only told that there was a problem. The scale of the scandal followed later. Describing his reaction, he said: "It would have to be dismay and shock and some anger."
He denied that the woman's actions might have been encouraged in some way by Mr Mayer's tough performance targets. He said Penguin had a stated policy that no discounts should be given for cash.
The City took a dim view of Mr Mayer's statements yesterday. One media analyst said: "It is basically a completely unsatisfactory answer. As chief executive he should have known. That he didn't suggests that his involvement did not stretch as far down the organisation as it should have done."
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Breaking: Soldier killed in Woolwich machete attack named as Drummer Lee Rigby
'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
Video: Woolwich attack - man with bloodied hands and knife addresses camera
Ingrid Loyau-Kennett, the mother-of-two hailed as a hero for confronting Woolwich attackers, thought: 'better me than a child'
- 1 Breaking: Soldier killed in Woolwich machete attack named as Drummer Lee Rigby
- 2 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 3 Grace Dent: I’m not sure how these people can avoid being called ‘bigots’. And the more ‘civilised’, the worse they are
- 4 Woolwich murder: They killed, then they performed - these men should be starved of our attention
- 5 Woolwich attack: The EDL will seek to exploit this evil crime for their own evil ends
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.