US meat processor Tyson Foods has announced that it has received notice that the staff of the US Securities and Exchange Commission (SEC) intends to recommend the SEC bring a civil enforcement action against the company.
The SEC is also considering seeking a monetary penalty, Tyson added.
The notice alleges that Tyson’s proxy statements for the fiscal years from 1997 to 2003 failed to fully comply with SEC regulations with respect to the description and disclosure of perquisites totalling around US$1.7m provided to Don Tyson, former senior chairman of the company. It also claims the company failed to maintain an adequate system of internal controls regarding the personal use of company assets and the disclosure of perquisites and personal benefits.
Tyson Foods said independent members of its board of directors have conducted a review of the matter, and Don Tyson has voluntarily paid $1.516m to the company for certain items identified by independent members of the board for the fiscal years 1997 through 2003.
“The company is presently unable to predict the outcome of this matter or the terms upon which it might eventually be resolved. However, the company does not believe the amounts at issue in any potential SEC action are material to the company’s financial position or results of operations,” Tyson Foods said.
In addition, the company said it has learned that Don Tyson has received notice of a possible SEC civil enforcement action against him.