Super Micro Computer Inc (Nasdaq: SMCI) shares rose Monday after a special committee investigation dismissed its former auditor’s concerns, though questions emerge about the review’s independence.
“Special Committee, supported by outside counsel Cooley LLP and forensic accounting firm Secretariat Advisors, LLC, finds no evidence of misconduct on the part of management or the Board of Directors and that the Audit Committee acted independently,” the company said in a statement.
The committee concluded October’s auditor resignation and related governance concerns were “not supported by the facts.” But the “committee” is comprised solely of recent board appointee Susie Giordano.
Corporate governance standards typically call for multiple independent directors, broad board mandate, and dedicated legal and financial advisors for such investigations. Giordano, who joined Super Micro’s board in August 2023 and serves as Chief Legal Officer at Lime, also recently received a $255,000 stock equity grant from Super Micro.
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Following the committee’s (or Giordano’s) recommendations, the company will implement substantial management changes, including replacing its CFO and appointing new compliance officers. Kenneth Cheung has been named chief accounting officer, while searches are underway for a new CFO and chief compliance officer.
Super Micro expects to file its delayed annual report for fiscal year 2024 and September quarter results within Nasdaq’s discretionary period, stating no restatements of prior financials are anticipated.
The company’s shares have fluctuated since the auditor’s October resignation over transparency concerns. Super Micro initially reported no evidence of fraud in early November.
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