Human Capital & Careers

Taro CFO Resigns Amid Options Inquiry

Nasdaq-listed pharmaceutical company is in danger of being delisted if it doesn't meet filing deadline.
Stephen TaubOctober 30, 2006

The chief financial officer of an Israeli pharmaceutical company resigned after an investigation into a previous restatement concluded that a member of senior financial management “caused the company to make misleading statements” to the Securities and Exchange Commission. Taro Pharmaceutical Industries announced that Kevin P. Connelly, senior vice president and CFO, as well as another member of financial management employed by Taro Pharmaceuticals U.S.A., resigned from their positions, effective immediately.

Both individuals vigorously disagreed with the findings of a report released by Jenner & Block LLP, the independent law firm retained by the Taro’s audit committee to investigate facts related to the company’s decision to restate financial results for 2003 and 2004, according to a press release. The company added that no other company personnel were found to have engaged in similar conduct.

The report concluded that the law firm found no evidence in the 2003 and 2004 financial statements that an intentional misstatement of reserves relating to sales to wholesale customers. Jenner & Block also noted that the audit committee had adequately investigated certain matters that the company’s independent auditor had brought to its attention related to the company’s 2005 financial statements.

Meanwhile, officials said that the company received another extension—November 17—to file its 2005 annual report, which would allow Taro to retain its listing on the Nasdaq Global Select Market. However, the company warned there was no assurance that it would be able to file the report by the new deadline.