The board of directors of Molson Coors Brewing Co. has launched a wide-ranging investigation into the actions of current and former executives regarding the merger of Adolph Coors Co. and Molson Inc.

According to the Rocky Mountain News, the board is focusing on transactions by chief executive officer Leo Kiely and chief financial officer Timothy Wolf following the February 9 closing of the merger. Exercising stock options and selling shares in the combined company yielded a profit of $654,945 for Kiely and at least $1.25 million for Wolf, reported the newspaper.

Amid declining sales, Molson Coors later announced a $46.5 million net loss for the first quarter. The announcement prompted a 20 percent single-day drop in its share price, or a $1.2 billion loss of market capitalization. The Securities and Exchange Commission has opened an informal inquiry into the quarterly loss, but it’s unclear whether the stock sales by Kiely and Wolf are part of the inquiry. Class-action lawsuits brought by shareholders have alleged that Molson and Coors executives knew about the negative sales trends before the merger was approved, the News also observed.

The Molson Coors audit committee will also examine the stock transactions made by insiders in the days leading up to the merger. To help boost support for the deal, Molson promised a special dividend of $4.60 per share. In the 11 days before the merger closed, Molson Inc. chief executive Dan O’Neill cashed in 1.9 million stock options and walked away with roughly $6.9 million, according to News estimates, in addition to a $4.8 million severance package.

The newspaper noted that the probe may also examine why the company disclosed in a May filing, and not in its official merger proxy, that Brazilian authorities were claiming Molson’s operations in that country owed more than $500 million of unpaid taxes.

The members of the Molson Coors audit committee are Pamela Patsley, a top executive at First Data and a Coors director since 1996; Franklin Hobbs, a former investment banker and a Coors director since 2001; and David O’Brien, a former energy industry executive and a Molson director since 2002.

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