visimoney
Commodity trader ADM is investigating accounting irregularities at its business unit in Switzerland and has placed its finance chief on administrative leave. The probe comes as ADM struggled with poor financial results, and raises concerns about the company’s internal controls and risk management. The company is cooperating with regulatory authorities and has appointed a law firm to conduct an independent review of its internal controls.
Financial results released on Tuesday show a 22% drop in ADM’s third quarter profit due to the oversupply of corn and soybeans. The investigation into accounting practices at its European headquarters in Rolle, Switzerland raises further concerns about the company’s ability to navigate challenging market conditions. ADM is one of the world’s largest agricultural commodity traders, and any instability or scandal could reverberate across the industry.
The probe is said to be related to questionable transactions involving third parties that may have boosted profit margins. ADM’s finance chief, Ray Young, has been put on administrative leave pending the results of the investigation. This move comes as ADM struggles with weak financial performance and a depressed market for commodities.
ADM is taking steps to restore investor confidence. The company is cooperating with regulatory authorities and has retained law firm Sidley Austin to conduct an independent review of its internal controls. ADM also said it plans to make changes to its finance organization and risk management practices to address the accounting irregularities.
Investors are concerned about ADM’s poor financial results and uncertainty about the future of the company. Shares dropped nearly 20% in after-hours trading following the announcement of the investigation. The drop wiped out almost $3 billion of ADM’s market value, and analysts believe it may take some time for the company to recover.
Overall, the investigation highlights the challenges facing commodity traders in today’s volatile markets. ADM’s struggle with accounting irregularities and weak financial performance raises concerns about the company’s ability to weather these challenges and maintain its position as one of the world’s largest commodity traders.
