LINCOLN, Neb. (DTN) -- An Archer Daniels Midland shareholder is calling for the company's CEO Juan Luciano to be removed in light of accounting problems reported by the company including Luciano's alleged lack of action to stem company losses as a result.
About one year ago ADM announced it was reviewing internal accounting practices and suspended its CFO Vikram Luthar. Luthar resigned his post effective on Sept. 30 and the company hired Monish Patolawala as CFO.
In March 2024, the U.S. Department of Justice launched an investigation into ADM's finances and issued subpoenas to current and former employees.
ADM stock has taken a big hit since January 2024 when news of accounting irregularities broke. ADM stock closed at $50.15 per share on Tuesday, down from $70.89 on Jan. 2, 2024 -- or a 29% drop.
"The fish always stinks from the head," Hartwig Fuchs, an ADM shareholder, wrote in a Dec. 29, 2024, post to LinkedIn about ADM's handling of the accounting problems.
"If a highly paid CEO of such an important company cannot manage to provide clarity within a few months -- i.e. fully clear up the scandal, communicate with full transparency about what went wrong and what will be done in the future, regain investors' trust and, above all, protect the company from long-term damage -- then he has to go."
Fuchs is the former chairman of the board at Toepfer International, a German trading company now 100% owned by ADM. Fuchs also previously served as CEO of Nordzucker AG, a European sugar company.
"The ADM company, the people who work at ADM -- and they are good people -- they must be protected and these negative reports must be stopped," Fuchs said on LinkedIn.
"And the share price must rise again to levels that properly reflect the company's true earning power (which, admittingly, would make me smile again)."
For the third quarter of 2024 ADM reported $18 million in profit, down from $821 million one year ago largely as a result of falling grain prices and overcapacity in biofuels production.
A spokesperson for ADM declined comment in response to DTN's request Tuesday.
Fuchs was critical of how ADM has handled communications regarding the ongoing investigation.
"For almost a full year, we have known about an apparent widening law enforcement investigation into ADM's internal pricing of inter-company transactions," Fuchs wrote.
During the company's earnings call on Dec. 3, ADM's new CFO Patolawala said the company is focusing on improving internal accounting controls.
"My first priority is the integrity of our financial statements and remediating the material weakness," Patolawala said.
ADM has said very little about the ongoing investigation. In the latest earnings call Luciano was not asked about nor did he provide any further details.
In the company's 10-Q form filed with the U.S. Securities Exchange Commission on Sept. 30, 2024, ADM provided the following update on the investigation, in part:
"In response, the company engaged external counsel, assisted by a forensic accounting firm, to conduct an internal investigation, overseen by the audit committee of the company's board of directors, which is separately advised by external counsel," ADM said.
The update noted that ADM was "cooperating with the SEC," and was "unable to predict the final outcome of these investigations with any reasonable degree of certainty."
For the previous story on the SEC investigation, read here:
Read the Hartwig Fuchs social media post: https://www.linkedin.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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