Diamond Foods’ delayed US$2.35bn acquisition of Pringles from consumer goods giant Procter & Gamble may have been dealt another blow.
Earlier this month, Diamond announced its acquisition of the snack brand would be delayed for six months following the launch of an internal probe into prices paid to walnut growers, which was sparked by an “external communication” sent to Diamond’s board of directors.
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Now Diamond Foods has issued a SEC filing warning that its audit committee’s investigation could have a raft of consequences that will “adversely impact” the company.
The filing said: “The time required or outcome of the audit committee investigation of Diamond’s accounting for certain crop payments to walnut growers could adversely affect Diamond.
“Among other things, the investigation could result in a determination that restatement of Diamond’s prior period financial statements is required, or a conclusion that there is a material weakness in Diamond’s internal control over financial reporting.
“In addition, the time required or outcome of the investigation could result in the inability of Diamond to timely file required periodic reports under the Securities Exchange Act of 1934, as amended, which could result in the commencement of NASDAQ delisting proceedings for Diamond’s common stock.”
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By GlobalDataThe company also expects to incur substantial costs as a result of the conclusion of the investigation.
Earlier this month, the audit committee retained law firm Gibson, Dunn & Crutcher and audit, tax and advisory services firm KPMG LLP to assist in the investigation.
Last week Diamond announced that director Joseph Silveira had died on 15 November. CNBC reported that the death was a suicide and that Silveira, a member of the snack maker’s audit committee, had recused himself from the investigation. Diamond insisted the death of Silveira was not linked to the probe.
