Chemours CEO, financial execs. placed on leave pending financial review

February 29, 2024 32

Chemours has placed top leaders on leave pending a financial control review. | DBT FILE PHOTO

WILMINGTON — Chemours has placed its top three executives, including CEO Mark Newman, on administrative leave pending an internal review and looking into potential weaknesses in its internal controls over financial reporting.

Newman and Chief Financial Officer Jonathan Lock and Principal Accounting Officer Carmela Wisel were placed on leave while the Chemours board of directors and independent and outside counsel review practices for managing working capital as well as other metrics included in filings with the Securities and Exchange Commission.

The weaknesses in internal controls on financials include the effectiveness of the “tone at the top” set by senior management, Chemours officials said in a statement. The chemical company expects to report any material results as of the end of 2023 and note steps to remediate it on its annual report.

Chemours announced the temporary leave of Newman and top financial financial executives in a press release late Wednesday night. The news caused Chemours stock to drop by 37% before the trading opened Thursday morning. By 1 p.m., the stock was hovering around $19.27 per share. The company is one of roughly a dozen publicly-traded companies in the First State and employs around 730 people, according to Delaware Business Times records.

In the meantime, the Chemours board of directors has appointed Denise Dignam as the Interim Chief Executive Officer and Matt Abbott as the interim Chief Financial Officer. Dignam had come with Chemours after the company spun off from Dupont in 2015, and for years before worked in leadership roles at Delaware’s largest company for years.

Abbott had served as Chemours senior vice president and chief enterprise transformation officer since June. He came to Chemours in 2017 after serving as a partner at PricewaterhouseCoopers LLP for five years.

The suspension of Newman and the top financial executives is the latest development of uncertainty for the Dupont spin-off. In mid-February, the company announced it would delay its fourth quarter and full year 2023 financial results by the end of the month.

The company will further delay its earnings release and annual financial results, and with no date set on when it will be available.

However, Chemours did share with investors unaudited financial reports for the year. It notes that it expects $6 billion in sales, down $8 million due to lower volumes in its portfolio of titanium technologies for coatings, plastics and laminates.

Chemours also expected lower volumes in its advanced performance materials portfolio, which includes Teflon, membranes that support the rising hydrogen economy, and Krytox lubricants.

The global chemical giant also expects a loss for the year between $225 to $235 million, mostly driven by millions in pre-tax litigation settlements on lawsuits stemming over the legacy of polyfluoroalkyl substances, or PFAS. PFAS includes a variety of chemicals associated with an increased risk of cancer, including an acid that was used in the production of Teflon.

Last summer, Chemours, Dupont and Corteva reached an agreement on $1.2 billion in so-called “forever chemical” lawsuits.

Chemours officials report that $746 million is expected to be spent on settlements, while another $153 million on restructuring and other asset-related changes.