SAN FRANCISCO - Diamond Foods fired Chief Executive Michael Mendes and Chief Financial Officer Steven Neil after an internal investigation revealed that crop payments to walnut growers were not properly accounted for.
The company is restating 2010 and 2011 financial statements to properly account for payments and has named Rick Wolford, previously CEO, president and chairman of Del Monte Foods, acting president and CEO. Michael Murphy, a managing director at Alix Partners will serve as acting chief financial officer.
"The Audit Committee has concluded that a 'continuity' payment made to growers in August, 2010 of approximately $20 million and a 'momentum' payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company's internal control over financial reporting,” said the company in a statement.
The mistakes put Diamond’s deal to acquire Pringles in jeopardy. Procter & Gamble agreed to sell Pringles to Diamond for about $1.5 billion, but had previously said the sale depended on a favorable resolution of the probe, according to reports.