SunEdison's audit committee finds no material misstatements
Solar parking canopies. Source: SunEdison, Inc.
The audit committee of SunEdison’s (NYSE:SUNE) board of directors has concluded its investigation into the company’s financial statements and found no material misstatements.
In a regulatory filing on Thursday, the committee said that SunEdison had fired a non-executive employee promptly after becoming aware of a wrongdoing by that person in connection with negotiations over the cancellation of the Vivint Solar (NYSE:VSLR) takeover. That deal was terminated on March 8 and the target subsequently filed a lawsuit against SunEdison, claiming it failed to meet its obligations.
Other than this unnamed employee’s wrongdoing, the audit committee has not identified “substantial evidence to support a finding of fraud or willful misconduct of management” during its investigation, the filing says.
Still, SunEdison’s independent directors have identified several specific issues regarding the company’s cash forecasting and liquidity management practices. In particular, they have found that SunEdison’s cash forecasting efforts lack sufficient controls and processes, and that certain assumptions underlying the management’s cash projections were “overly optimistic”. The independent directors have also determined that the management had not responded appropriately when the projected targets were not achieved.
SunEdison twice missed a deadline to file its annual report because of the audit committee’s investigation and the identified material weaknesses in its financial reporting controls. The company is also being investigated by the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) regarding some corporate actions.