CHICAGO โ ADMโs stock experienced a sharp decline on Jan. 22 after the company announced that its chief financial officer, Vikram Luthar, had been placed under administrative leave amid an investigation into accounting practices in its nutrition segment.
ADMโs stock opened at $56.88 on Jan. 22, down16.6% from its previous close of $68.19 on Jan. 19. The stock price continued to decline and traded at a 52-week low of $52.46 in mid-morning trading on Jan. 22.
Luthar has been placed on administrative leave following a Securities and Exchange Commission (SEC) โvoluntaryโ request for documents. ADMโs outside counsel and board audit committee are looking at accounting practices in its nutrition segment, including intersegment transactions. Luthar was promoted to CFO in April 2022 and has been with ADM since 2004.
Ismael Roig, an executive who was president of both Europe, Middle East and Africa operations and president of animal nutrition at ADM, has been named interim CFO. He has been with ADM since 2004. Prior to ADM he spent 11 years with General Motors Corp. in various treasury, finance and controller positions.
โThe board takes these matters very seriously,โ said Terry Crews, lead director, ADM. โPending the outcome of the investigation, the board determined that it was advisable to place Mr. Luthar on administrative leave. The board will continue to work in close coordination with ADMโs advisers to identify the best path forward and ensure ADMโs processes align with financial governance best practices.โ
Roig said he would be working in partnership with the team at ADM to move forward, despite the SECโs probe.
โI look forward to working closely with the management team and board, including the audit committee, as we resolve this matter and continue to drive value for our stockholders and customers,โ he said.
ADMโs nutrition segment accounted for $468 million of the companyโs $4.67 billion operating profit through the first nine months of the year. ADMโs outside counsel and board audit committee are looking into accounting practices in its nutrition segment, including intersegment transactions.
The company said it now expects to deliver above $6.90 in adjusted earnings per share for the fiscal year ended Dec. 31, 2023, which is lower than the $7.27 expected by analysts. ADMโs ag services and oilseeds and carbohydrate solutions units will report results in line with expectations it gave in the third quarter, according to the company.
ADMโs stock has fallen 19% over the last year, while the S&P 500 has gained 22%. The stockโs 52-week high is $87.30, while its 52-week low is $52.46.
