The US agribusiness giant disclosed a delay in its release of its Q4 and full-year financial results due to the probe.
Ismael Roig has been appointed as the interim CFO, stepping in during Luthar's leave, pending the outcome of the investigation led by outside counsel for ADM and the board's audit committee. The focus of the inquiry revolves around "intersegment transactions" within the nutrition segment.
The initiation of the probe was prompted by a voluntary document request from the US Securities and Exchange Commission (SEC), and ADM stressed it is cooperating with the SEC throughout the process.
Terry Crews, lead director, emphasized the board's serious approach to the matter: "Pending the outcome of the investigation, the board determined that it was advisable to place Mr Luthar on administrative leave."
Crews said the board would continue to work closely with ADM’s advisors to identify the best path forward and ensure ADM’s processes align with “financial governance best practices."
Vikram Luthar, who has been with ADM for almost two decades, assumed various leadership roles before becoming CFO in 2022.
Analysts, including Goldman Sachs' Adam Samuelson, highlighted the significance of understanding the full scope of potential accounting irregularities and their impact on nutrition segment revenues and margins.
In ADM's Q3 earnings report from October of the previous year, the company revealed a notable decline in the human nutrition business. Additionally, persistently low market demand for plant-based proteins in meat alternatives impacted the nutrition segment. The animal nutrition sector also reported diminished results in the same quarter compared to the previous year, attributed to lower demand for amino acids and pet food ingredients, among other challenges.