(Alliance News) - Sweeteners producer PureCircle Ltd on Thursday said a ongoing accounting review has identified potentially improper transactions and, as a result, Chief Executive Magomet Malsagov has voluntarily agreed to stand down on a temporary basis, pending further investigation of the transactions.
Chair John Slosar will assume interim chief executive role with immediate effect and will be assisted by Malsagov acting as an adviser to the chair, the company added.
On Tuesday, PureCircle had reported the resignation of Chief Financial Officer Rakesh Sinha, effective January 31. The departure had been attributed to Sinha's intention to return to the UK and continue his career there.
The Kuala Lumpur, Malaysia-based stevia sweetener producer also said on Thursday that its inventory value could reduce by USD23 million following a provisional assessment of the company's classification and valuation of inventory by KPMG LLP.
The company appointed KPMG in September to investigate issues with the way inventory was classified and valued with an aggregate value of up to USD30 million
"The company does not expect this amount to change materially, but it has yet to be signed off by the group's auditors, PricewaterhouseCoopers. The adjustments will have consequential effects on the potential carrying value of some of the group's intangible assets and inventory items, some of which may be material. The adjustments will be reflected in the group's audited financial statements for the year ended 30 June 2019," PureCircle said.
It added that the inventory issue will have no impact on its debt or cash generation.
PureCircle said it is in talks with banks and is seeking waivers with regards to certain loan covenants.
Shares in the company have been suspended from trading in London since late October due to delay in publication of its annual results as a result of the ongoing KPMG probe.
By Tapan Panchal; tapanpanchal@alliancenews.com
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