Skip to main content

Chemours publishes initial findings of review

The Audit Committee of the Chemours board has delivered a “substantially complete” report of the findings of the internal review it was tasked to complete with regard to the conduct of CEO Mark Newman, CFO Jonathan Lock and principal accounting officer Camela Wisel. All three were put on administrative leave on 29 February pending its completion.

The review determined that there was a lack of transparency by the three and that they violated the company’s Code of Ethics relating to the ”promot[ion of] full, fair, accurate, timely and understandable disclosure”. This does not affect the preliminary, unaudited estimates of operating results for 2023 as disclosed at the same time.

Among other things, the committee determined that the three sought to delay payments due in Q4 2023 into Q1 2024 and accelerate the collection of receivables due in Q1 into Q4. This was done in part to meet free cash flow targets that would be part of a key metric for determining incentive compensation for executive officers. It also happened, to a lesser extent in Q4 2022.

The review relates to an anonymous report made to Chemours’ ethics hotline that was not elevated to the General Counsel or the Audit Committee, until it was identified in connection with the year-end 2023 external audit process. This, the committee said, “resulted from inadequate controls and procedures regarding the evaluation and escalation of hotline reports and poor judgment by certain employees who handle the intake of such reports”.

As a result, the company is evaluating one or more potential material weaknesses in its internal control over financial reporting with respect to maintaining effective controls related to the control environment, including the effectiveness of the ‘tone at the top’ and communication components of the COSO internal control framework, including controls over the ethics hotline programme. Denise Dignam and Matt Abbott are acting as interim CEO and CFO respectively.

This all came after the company announced a delay to its Q4 and full-year 2023 results, which were due to be issued on 29 February. It has filed a Form 12b-25 with the SEC and will announce a revised date at a point as yet unknown. The Q4 results had already been delayed from 13 February and the company’s share price fell by 45% in that time frame.

Add new comment

Plain text

  • No HTML tags allowed.
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.