An investigation by SunEdison’s audit committee into the accuracy of the renewable energy company’s reported financial position has criticised cash forecasting and liquidity management practices.
According to a Form 8-K filed with the US Securities and Exchange Commission, the investigation found SunEdison’s management did not respond appropriately when forecasted targets were not met.
Cash forecasting also lacked “sufficient controls and processes” and there was an “overly optimistic culture and tone at the top”, the filing said.
As a result of the investigation, SunEdison must implement “improved cash forecasting systems” and controls to “manage, monitor and fully communicate changes in outlook directly to the board”.
The board will also be required to be more transparent “regarding cash management practices” and “ensure assumptions and estimates are made with a reasonable basis”, the filing said.
The recent hiring of a chief financial officer designee would “act as a remedy”, while training and communications programmes will also need to be implemented.
The Form 8-K said the investigation did not find any evidence of fraud or wilful misconduct of management.
However, one staff member has been sacked, SunEdison said, over the collapse of the Vivint Solar acquisition.
The company said it sacked the employee when it became aware of unspecified alleged wrongdoing in relation to the merger.
The company is under investigation by the US justice department into the cancelled $1.9bn acquisition of Vivint Solar.
Image: a SunEdison solar plant (SunEdison)
Audit probe censures SunEdison
Management did not respond appropriately when forecasts were not met
By EBS