Wessanen, the Dutch food group, today (15 June) admitted that it has uncovered financial irregularities within one of its branded businesses in North America.
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The company, which is mulling the sale of its operations across the Atlantic, was cagey about the details surrounding the irregularities but revealed the investigation centred on drinks unit American Beverage Corp. (ABC).
Wessanen said “preliminary” findings from an investigation into ABC’s financial reporting had found the unit’s results were “misstated over a number of years, going back to 2006”.
“As a result, equity of Wessanen as at year end 2008 potentially has been overstated by approximately EUR10m (US$13.9m), assuming full tax relief,” Wessanen said. “The investigation is still in its early stages. An update will be provided when further results from the investigation are available.”
In a statement, Wessanen said the CEO and CFO of ABC have left the business, although when pressed, a Wessanen spokesman told just-food that the chief executive left the unit a few months ago “of own his accord”. The CFO, however, was “asked to step down”, the spokesman said, although he declined to say whether that departure was linked to the financial irregularities.
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By GlobalDataThe spokesman also declined to name the CEO and CFO, insisting that Wessanen would “prefer not to comment” on their identities. New management has been installed at the business.
In February, Wessanen announced plans to consider the sale of ABC, which accounts for three-quarters of revenues from the group’s branded operations in North America. The spokesman refused to be drawn on whether the Dutch group had started talks with potential suitors for ABC or what impact the investigation would have on any plans to sell the unit.
However, the spokesman insisted that the probe would not affect Wessanen’s plans to offload its wider North American operations, including the Tree of Life business.
