UPDATE: Strong Results for GN ReSound Overshadowed by Beltone Accounting Fraud; Murray Resignation

August 17, 2015

Editor’s Note: this evolving story was last updated on 8/24/2015

COPENHAGEN, DENMARK – another strong quarter posted by GN ReSound was overshadowed last week by news that serious accounting fraud had been committed by GN’s retail arm, Beltone.

In its Q2 Interim Report, GN reported a one-time loss of more than $22 million dollars (DKK $150 million) in the second quarter due to the fraud–committed by Beltone’s VP of Finance from 2012-2014. According to sources, the investigation is ongoing and the individual in question has been terminated by the company.

Shares of GN Store Nord A/S{{1}}[[1]]GN Store Nord A/S (GN) is a Denmark-based holdings company GN markets its headsets under the Jabra brand and the Company’s hearing aids are sold under the ReSound, Beltone and Interton brands. GN Otometrics, a subsidiary of GN ReSound, develops, manufactures and markets audiology diagnostic equipment under the Madsen, Aurical, Hortmann and ICS brand names.[[1]] were negatively impacted by the news–falling the most in four years–immediately following the announcement, along with disappointing results from GN’s headset division, GN Netcom.

According to Lisa Clive, a hearing industry analyst at Sanford C. Bernstein Ltd., Beltone currently provides about 17 percent of GN ReSound’s revenue.


Murray Resigns


Todd A. Murray, MBA

Only a few short days following the revelation of accounting fraud, the President of GN Hearing Care Corporation North America, Todd A. Murray, resigned from the company. A well known leader in the hearing industry, Murray also held concurrent positions as President of GN Hearing Care Canada and also as President of Beltone.

Murray had been President of GN Hearing Care Corporation North America since 2009 and, since 2004, had served as President of Beltone. 



GN Leadership Responds

While acknowledging the disappointment in the financial fraud, CEO Anders Hedegaard highlighted the otherwise positive outlook of GN’s global hearing aid business, which delivered 8% organic growth in the second quarter.

Anders Hedegaard, GN ReSound CEO

Anders Hedegaard, GN ReSound CEO

“Obviously, I’m troubled with the accounting fraud in Beltone. But having said that, what matters is that GN ReSound continued its very strong momentum in Q2. The successful launch of ReSound LiNX2 documents our ability to continuously advance our technology leadership. With the launch, we have also demonstrated strong commercial execution leading to significant growth in key segments such as Veterans Affairs, Germany and Japan.

It is truly exciting to see the recognition of our innovative technology as a contributor to improving the quality of life for hearing impaired”

Anders Hedegaard, GN ReSound CEO


More to the Story?

A reliable source who previously had a close working relationship with the leadership at GN and Beltone spoke to Hearing News Watch on the condition of anonymity regarding the situation:

“I heard about the events leading up to Todd Murray’s resignation last week… I do not know who Todd’s finance head was, but I find it odd that the (alleged) crook’s name is nowhere to be found, but no one seems to have any problem with plastering Todd’s name and resignation news everywhere.”


Hearing News Watch will continue to monitor this developing story–stay tuned for updates.

    1. Henry, you should read Holly’s extensive analysis on the beltone situation at Hearing Economics.

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