US prosecutors are investigating Archer Daniels Midland due to their accounting procedures. The chief financial officer of the global agricultural commodities trader was put on leave last month while an internal investigation was conducted.
ADM, a company based in Chicago, is a significant participant in the worldwide trade and processing of grains and oilseeds, which it transforms into animal feed, fuel, and food ingredients. Together with Bunge, Cargill, and Louis Dreyfus, ADM is one of the four ABCD enterprises that are believed to manage over 70% of the globe’s food trade.
In the previous month, the corporation suspended Vikram Luthar, who had been serving as the chief financial officer since 2022. This was after the company revealed that an “ongoing investigation” by external legal counsel was taking place. The investigation was related to specific accounting practices and procedures concerning ADM’s nutrition reporting segment.
The staff of ADM have been told that the internal audit was related to the transfer of goods between business departments and financial accounting, by the ADM chief executive, Juan Luciano. ADM is currently under investigation by the US Department of Justice regarding their accounting procedures, said a person who is not a stranger to the situation. ADM said that they launched the internal audit last month, after receiving a request for documents from the US Securities and Exchange Commission, which could bring civil enforcement actions into play.
Recently, the Department of Justice’s Southern District of New York has conducted interviews with former employees of a trading company regarding their accounting procedures. The news was revealed by an insider source. Both ADM and the Southern District have declined to comment on this investigation, which was first reported by Reuters.
On January 21, ADM announced an investigation and delayed the release of its Q4 results. As a result, it revised down its yearly earnings guidance from $7 to $6.90.
Last month, ADM stated that its board takes the matter seriously. Consequently, Luthar was placed on leave during the internal investigation. Ismael Roig, a seasoned executive, was named interim finance chief.
After having Luthar suspended for three days, ADM’s dividend was increased by 11% by the board of directors, bringing its price per share from $0.45 to $0.50. In a message to all employees, Luciano emphasized that the audit in the nutrition business wouldn’t “significantly impact the overall results”.
Pylyp is an experienced private banker and asset manager.