Major Minnesota Agribusiness Reports Financial Misconduct
MINNEAPOLIS (AP) — Global agribusiness CHS Inc. said it recently fired an employee for "intentional misconduct" that made the company appear more profitable than it was for years.
The Star Tribune reported Friday the company told investors the news this week in a filing with the Securities and Exchange Commission. The company said the employee, whom it did not identify, misvalued rail freight contracts and that led to CHS overstating its pretax profit by as much as $190 million during the past four fiscal years. That amount translates to about 12 percent of the company's $1.6 billion pretax profit over that span.
CHS told investors financial statements for that time "should no longer be relied upon" and will have to be restated.
The company declined to say whether it was taking legal action against the employee.
CHS is based in Inver Grover Heights, Minnesota, and is owned by farmers, ranchers and cooperatives.
In a letter to co-op members, CEO Jay Debertin said the company's investigation is ongoing but so far it appears "there was no monetary loss to CHS."
CHS became Minnesota's fifth-largest business last year with revenue of nearly $32 billion.
The company said the employee also made "intentional misstatements" to PricewaterhouseCoopers during an audit. CHS is working to address failures in its internal controls for financial reporting, the company said in its regulatory filing.