(Bloomberg) — Super Micro Computer Inc. said an independent investigation of its activities found no evidence of wrongdoing, but recommended the server maker appoint a new top financial and legal leader.
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An investigation by a special board committee, along with attorneys from Cooley LLP and forensic accounting firm Secretariat Advisors, found that there was “no evidence of misconduct on the part of management or the board of directors and that the audit committee acted independently.”
As a result of the findings, the committee recommended that Super Micro install a new Chief Financial Officer, Chief Compliance Officer and General Counsel, the company said in a statement on Monday. “The board of directors has directed management to add additional experienced, senior talent, appropriate to the current size and complexity of the business, and to prepare for future growth,” Super Micro said in the statement.
The company’s shares rose as much as 16.4% on Monday after markets opened in New York.
Super Micro expects no changes to previously published financial results for the most recent fiscal year, the company said. Kenneth Cheung, previously vice president of finance, will become the company’s new Chief Accounting Officer. And the company has begun the search for a new CFO to replace David Weigand.
It’s been a tumultuous year for Super Micro. The maker of high-performance servers missed the deadline in August to file its annual financial report and its accountant, Ernst & Young LLP, resigned in October over concerns about the company’s governance and transparency. The company is also facing an investigation from the US Department of Justice following a damaging report from short seller Hindenburg Research.
EY raised its concerns with Super Micro’s audit committee in July. In response, the board investigated revenue recognition practices, export control policies, rehiring employees who resigned after previous accounting issues, and disclosure of related party transactions. The investigation found that “the conclusions stated by EY in its resignation letter were not supported by the facts examined in the investigation.”
In November, Super Micro appointed BDO USA as its independent auditor and submitted a plan to comply with Nasdaq listing requirements. Completing the internal investigation clears a major hurdle to submitting the audited financials, wrote Woo Jin Ho, an analyst at Bloomberg Intelligence.
(Updates with stock move in fourth paragraph.)
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