Clariant has delayed the release of its annual results to investigate claims its accounts were manipulated, sending shares in the Swiss chemicals group down 20 per cent on Monday.
The investigation was focused on allegations from internal whistleblowers that provisions and accruals for the group’s 2020 and 2021 accounts were incorrectly booked to meet financial targets, Clariant said on Monday.
After whistleblowers made the company's compliance department aware of the allegations on September 10th, Clariant said it hired professional services firm Deloitte and law firm Gibson, Dunn & Crutcher in November to help investigate.
The probe may result in Clariant having to restate some previous financial statements, the company said, adding that it had not progressed far enough for its auditor, PwC, to sign off its annual results.
"The investigation is not entirely concluded, but suggests that there was a limited group of people globally who may have intended a profit steering to build some performance buffer," Peter Steiner, head of the board's audit committee, told reporters.
“We have no indication whatsoever that anyone has had any personal gains from this,” he said.
Clariant added that no information had been passed to prosecutors but it could not rule out criminal investigations until the investigation was complete.
Shares in the company were down 16 per cent in Zurich, leaving the group’s market capitalisation at CHF5.58 billion (€5.33bn).
The accounting issues could affect the group’s earnings before interest, tax, depreciation and amortisation for 2020 and 2021, but would not change its sales or cash, the company said.
Fresh blow
The claims are a fresh blow for a group that has had a bruising few years. The Swiss group called off a $20 billion merger with US competitor Huntsman in 2017 after an activist investor opposed the deal. The activists sold their stake to Saudi Basic Industries Corporation, which now owns just over 30 per cent of the speciality chemicals group.
Markus Mayer, an analyst at Baader Bank, said that for Clariant shareholders it would feel like "groundhog day", with a fresh set of problems under new management.
If the share price weakness were to persist it could ultimately open “the door for M&A discussion”, Mr Mayer added.
Clariant is a producer of chemicals used in industries including personal care, petrochemicals and consumer goods. The company said its full-year results would be released “in due course”, adding that a new date would be set for its annual shareholder meeting.
"We encourage our staff to speak up and therefore appreciate that our employees brought this issue to our attention," said Conrad Keijzer, Clariant chief executive.
“We will also get to the root causes of this problem by addressing our controls and processes, and further strengthening a culture built on the highest ethical standards,” said Mr Keijzer, who joined in December 2020 after the top position had been empty for more than a year. – Copyright The Financial Times Limited 2022
