Chemours Responds to Regulators, Prosecutors About Internal Audit

By Ben Glickman

Chemours has received requests for information from regulators and federal prosecutors after a probe found multiple executives shifted cash flows to boost their bonuses.

The company disclosed in its annual report on Wednesday that it was cooperating with information requests from the Securities and Exchange Commission and U.S. attorneys in the Southern District of New York about its recent internal review.

The interest from regulators and prosecutors marks the latest drama in a drawn-out saga for the Teflon-maker, which has involved multiple delays in reporting results and the suspension of its top executives.

Chemours launched the internal audit in February in response to an anonymous tip on its ethics hotline and delayed its fourth-quarter earnings report. The company later opted to suspend its chief executive, chief financial officer and chief accounting officer until the probe was finished.

The investigation found the executives moved to delay payments and speed up collection of certain receivables. The company's audit committee said the executives had sought to meet certain cash flow targets that were tied to annual stock and bonus awards.

The company said its audit had also found that similar actions had been taken in the fourth quarter of 2022, though to a lesser extent"

Chemours said Wednesday that the inquiries from the SEC and U.S. attorneys were specifically related to the results of the audit committee internal review and its disclosures about the review.

Chemours said in its annual filing that its lack of internal control over financial reporting was partially a result of senior management failing to set an appropriate tone, specifically related to the delayed payments.

In Chemours's audited results, the company posted a narrower loss in the fourth quarter as revenue rose.

The Wilmington, Del.-based chemicals company reported a loss of $18 million, or 12 cents a share, in the quarter ended Dec. 31, compared with a loss of $97 million, or 65 cents a share, a year earlier.

Revenue rose 1.7% to $1.36 billion, ahead of the $1.32 billion expected by analysts polled by FactSet.

Chemours named Denise Dignam, who led the company on an interim basis during the probe, as its permanent chief executive last week.

Dignam said in a statement with fourth-quarter results that the company's results had been dented by continued destocking in certain end markets in 2023.

Chemours shares were down 8.8% to $26.35 in after-hours trading.

Write to Ben Glickman at ben.glickman@wsj.com

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March 27, 2024 17:58 ET (21:58 GMT)

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