The controller of DPL Inc. has charged the Ohio utility’s top executives with self-dealing, according to the Dayton Daily News.
DPL controller Daniel Thobe’s March 10 internal memo — which the News says it received anonymously — was addressed to W. August Hillenbrand, chairman of the company’s finance and audit review committee. In the memo, Thobe charged that three key executives failed to disclose efforts to “potentially reap great personal reward” in the event of a “change of control” in the company, kept some executive compensation hidden from shareholders, and didn’t properly document $260,000 in travel costs last year.
“I do not want there to be a perception that I may be participating in, or allowing to go unmentioned, unethical behavior,” wrote Thobe, according to the paper. He urged the board to conduct its own probe and to meet with the company’s independent auditors outside the presence of the top executives and their consultants.
The three executives named in the memo are chairman Peter H. Forster, interim chief financial officer Caroline E. Muhlenkamp, and president and chief executive officer Stephen F. Koziar Jr.
A press release issued by DPL stated that the audit committee chairman received a letter from an employee, which it did not identify, containing unsubstantiated concerns about the company. DPL added that its management disagrees with the opinions and perceptions presented in the letter, that the employee had no basis for the assertions, and that there are no material issues with the company’s financial statements.
In the Dayton Daily News, however, Thobe noted that he brought his concerns to the board because he was supposed to be one of the executives responsible for signing off on DPL’s annual report, which was scheduled to be filed Monday with the Securities and Exchange Commission. After he raised concerns, added the controller, he was removed from the list of signers by Muhlenkamp, the CFO. “I am pleased with that,” Thobe wrote in his memo.
On Monday, DPL filed for an extension to file its annual report, saying it “was not able to timely complete its financial statements without unreasonable effort or expense.”
In the nine-page memo, Thobe stated that “there is minimal independent oversight of the activities of the top three executives, which is extremely rare based on my experience with other publicly held companies.” Among his assertions:
- A DPL subsidiary entered into a business deal with a company that raises conflict-of-interest questions about Forster, Muhlenkamp, and Koziar.
- Top executives changed the rules for a deferred compensation plan to enable themselves to collect millions of dollars years ahead of schedule. Forster, Muhlenkamp, and Koziar cashed out about $10 million in restricted stock at the end of 2003, according to the News.
- Muhlenkamp has been one of DPL’s highest-paid executives for years, but her compensation still hasn’t been detailed in SEC filings.