Chemours disclosed it received requests for information from the Department of Justice and Securities and Exchange Commission (SEC) regarding findings from an internal review into alleged accounting misconduct by several of its top executives.
The chemicals company’s latest update, contained within its annual report published Tuesday, follows its announcement earlier this month that its audit committee’s investigation into the actions of then-Chief Executive Mark Newman; then-Senior Vice President and Chief Financial Officer Jonathan Lock; and then-Vice President, Controller and Principal Accounting Officer Camela Wisel uncovered violations of its code of ethics regarding the promotion of full, fair, accurate, timely, and understandable disclosure.
Chemours said it was contacted by the SEC and the U.S. Attorney’s Office for the Southern District of New York and is cooperating with their requests.
The company said its probe found Newman, Lock, and Wisel “engaged in efforts in the fourth quarter of 2023 to delay payments to certain vendors that were originally due to be paid in the fourth quarter of 2023 until the first quarter of 2024 and to accelerate the collection of receivables into the fourth quarter of 2023 that were originally not due to be received until the first quarter of 2024.” Their alleged actions were taken to meet free cash flow targets the company had communicated publicly that were expected to play a key part in dictating their respective incentive compensation packages.
The company announced in a press release Tuesday it identified four material weaknesses in its internal control over financial reporting (ICFR) as of Dec. 31, 2023, in relation to the executives’ alleged actions. The weaknesses resulted in immaterial revisions to several of the company’s 2023 quarterly financial statements, and it said it is in the process of designing and implementing enhancements to its ICFR.
Chemours said it is facing two class-action lawsuits filed this month related to the scandal.
The company announced March 22 the appointment of Denise Dignam as its new CEO and that Matthew Abbott will continue to serve as interim CFO as it searches for a permanent candidate.
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