A former finance employee is apparently at the center of the decision by auto-parts maker Visteon Corp. to delay the filing of its March 31 quarterly report.
An internal review, explained the company in a press release, raised “allegations of potential improper conduct by a former senior finance employee responsible for the accounting oversight for North American purchasing activities.”
Visteon stated that it identified errors in accruals for costs principally associated with freight and material surcharges for prior periods. They include about $13 million of freight expense payable to transportation providers and about $18 million of surcharges payable to raw-material suppliers.
The company’s audit committee will hire outside accounting and legal advisors to investigate further. Visteon added that it cannot yet determine whether it will need to restate prior results. Spokesman Jim Fisher told the Detroit News that the Securities and Exchange Commission is “aware of our situation” and that the company is “cooperating fully with the SEC.”
Visteon stated that the filing delay would not affect its discussions with Ford Motor Co., in which the auto-parts maker is seeking “significant structural changes to Visteon’s U.S. business, including an agreement with Ford that will allow the company to achieve a sustainable and competitive business model.” Absent such changes, Visteon warned that it believes “cash flow from operations, including the impact of the Ford funding agreement, will not be sufficient to fund capital spending, debt maturities and other cash obligations in 2005, and, therefore, Visteon will need to incur additional debt.”
Meanwhile, auto-parts rival Delphi Corp., which is embroiled in an accounting scandal of its own, hired restructuring specialist Rothschild Inc., according to Reuters.