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US prosecutors are investigating accounting procedures at Archer Daniels Midland, the global agricultural commodities trader that placed its chief financial officer on leave last month pending its own internal probe.
Chicago-based ADM is one of the world’s largest traders and processors of grains and oilseeds, crops it transforms into food ingredients, animal feed and fuel. It is one of the ABCD companies — along with Bunge, Cargill and Louis Dreyfus — that are estimated to handle more than 70 per cent of global food trade.
The company last month put Vikram Luthar, who had been chief financial office since 2022, on administrative leave as it disclosed an “ongoing investigation” by outside counsel “regarding certain accounting practices and procedures with respect to ADM’s nutrition reporting segment”.
Juan Luciano, ADM chief executive, later told staff that the internal inquiry concerned the transfer of goods between business segments and financial accounting related to it.
The US Department of Justice is probing accounting procedures at ADM, said a person familiar with the matter. ADM last month said it had launched its internal investigation after receiving a request for documents from the US Securities and Exchange Commission, which can bring civil enforcement actions.
The DoJ’s Southern District of New York has recently interviewed former company staff about the trader’s accounting procedures, the person familiar with the matter said. The Southern District and ADM declined to comment on the justice department’s probe, which was first reported by Reuters.
Upon announcing the investigation on January 21, ADM also revised down its yearly earnings guidance from $7 a share to $6.90 and delayed the release of its fourth-quarter results.
The news triggered a 24 per cent fall in the company’s share price — the largest one day drop since 1929. ADM shares were down 4.4 per cent on Monday.
ADM last month said its “board takes these matters very seriously” and that it had found it “advisable” to place Luthar on leave pending the outcome of the internal probe. Ismael Roig, a longtime executive, was appointed interim finance chief.
Three days after Luthar was put on leave, the board of directors boosted ADM’s cash dividend by 11 per cent from $0.45 a share in the last quarter to $0.50. Luciano also stressed in a message to all staff that the probe into the nutrition business would not “materially affect our overall results”.
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