Rica Foods Inc disclosed yesterday (21 December) that it has appointed a special investigation subcommittee to investigate certain transactions made by the company's former CEO Calixto Chaves.

In a filing with the Securities and Exchange Commission, the poultry producer added that that the company's audited and un-audited financial statements and related independent auditors' reports since December 1999 should no longer be relied upon.

On September 27, 2005, the board of directors received a letter from a shareholder of Rica alleging the occurrence of certain undisclosed transactions between the company and Chaves, his affiliates and/or Industrias Avicolas Integradas, a Nicaraguan poultry and animal feed company, during Chaves' tenure as CEO of Rica from August 1996 until January 2005.
 
The filing said: "Although the investigation is still in process, the committee has advised the board of directors and the audit committee that the committee has secured statements and/or documents that indicate the alleged transactions probably did occur."

The company said it believes that the alleged transactions will have an effect on certain of the company's previously filed financial statements.

The company anticipates that revised financial statements and auditor's reports will not be issued at least until the investigation is complete.