(Reuters) – Diamond Foods Inc removed top management after its audit committee found that the company improperly accounted for payments to walnut growers, sending its shares down 40 percent in after-hours trading.
The company, maker of Emerald nuts, Kettle chips and Pop Secret popcorn, also said that earnings for its 2010 and 2011 fiscal years will need to be restated to account for the payments.
The result of the probe has thrown into doubt the company’s deal to buy the Pringles potato chip business from Procter Gamble Co..
Chief Executive Michael Mendes and Chief Financial Officer Steve Neil have been placed on administrative leave, the company said in a statement, adding that it was seeking permanent replacements for the two men.
Diamond named director Rick Wolford as acting chief executive and Michael Murphy of consulting firm Alix Partners as acting finance chief.
The company is being investigated by the U.S. Securities and Exchange Commission over the accounting. In addition, the Wall Street Journal reported that U.S. prosecutors have launched a criminal inquiry.
The announcement Wednesday is the
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