Valeant Pharmaceuticals International Inc, a specialist drug-making company, announced on Monday that its CEO was leaving and handing over responsibilities to the company’s long time and loyal financier, William Ackman. This comes at a time when the firm is striving to clear up accounting scandal set-backs and uphold the business.
The Canadian based firm that deals in drug prescriptions and consumer products, among others, saw its value decline by approximately 90 per cent after concerns were raised with regard to the way its prices were set and how its products were being distributed. This was coupled with an inquiry that was launched into the company by the government and other administrative agencies.
Valeant has laid the liability of accounting scandals on the misconduct by the senior members of the company.
The company revealed that the CEO, Michael Pearson, who had been on two months sick leave, would be exiting just 21 days after he reported back. The company also made it public that the seat would be given, yet again, to Ackman of Pershing Square Capital Management, who holds a share of 6.3 per cent as of March 8th.
According to a report by a board committee that investigated the firm’s transactions, for as long as five months, with Philidor Rx Services stated that there were clear indications that gross accounting issues began as early as the end of 2014.
Valeant however, said that the committee was still undertaking its investigations and that re-statements are necessary.
The committee linked a number of the problems to Howard Schiller, the chief financial officer and replacement for Pearson while he was on his medical leave. Schiller still remains a board member.
According to the company, the misconduct by the business controllers and Schiller played a big role in the financial misstatements since they provided both the auditors and the board committee with incorrect data.
The firm promised to avail its annual report either on or before the 29th of April after it failed to beat its deadline last week, an action which they paid for as it resulted in a default on a portion of the $30 billion debt burden the company currently bears.
Last week, the firm, whose shares price stayed within the $60 range, plunged by half as financiers raised concerns over the ability of the company to deal with its debt, which came as a result of several acquisitions.
The company has, since August, seen its market share deteriorate by $80 billion.
Timothy Chiang, an analyst with BTIG, confirmed that the actions relayed on Monday appeared to mark the beginning of a fresh start up, which of course will take considerable time, but the quicker Valeant took in submitting its 10K filing the better it would be for them.