DuPont Shareholders for Fair Value Calls on SEC to Investigate DuPont
Shareholders Cite Federal Criminal Probe of Company's
Record of Hiding Data on Teflon Chemical
The following is a statement from the DuPont Shareholders for Fair Value:
NASHVILLE, Tenn., May 24 /PRNewswire/ -- In light of an ongoing federal criminal investigation of DuPont Co. disclosures to EPA surrounding the chemical PFOA, a coalition of company shareholders is asking the Securities and Exchange Commission to investigate whether executives at the chemical giant are hiding financially relevant information from investors. The DuPont Shareholders for Fair Value (DSFV) coalition is also calling on the SEC to compel company executives to disclose data that would forewarn investors about potentially costly health, safety and legal liabilities at plants that use or produce perfluorooctanoic acid (PFOA), the chemical that is the subject of a U.S. Environmental Protection Agency investigation of potential health risks. "DuPont has an obligation to provide investors with full and honest disclosure about the liabilities associated with PFOA," said attorney Sanford Lewis, a corporate accountability expert and spokesman for the shareholder coalition. "Given the company's track record of secrecy on PFOA, we are asking the SEC to step in and compel the company to release data investors have a right to know." The U.S. Justice Department's Environmental Crimes Section last week served DuPont with a grand jury subpoena demanding that it turn over documents related to PFOA. The price of DuPont stock fell 2.2 percent from prior to the announcement of the subpoena on Thursday till the market close on Friday. A year ago, the EPA accused DuPont of failing to report information over two decades about risks that PFOA potentially causes to humans and the environment. DuPont recently said it has set aside $15 million based on a settlement agreement in principle on EPA's civil claims, but final settlement of the civil claims may take at least five months. In February, DuPont agreed to pay $108 million to settle a class-action lawsuit by West Virginia and Ohio residents who claimed PFOA contaminated their water supplies from DuPont's Washington Works plant in Parkersburg, W.Va. The $108 million settlement may not be the end of the company's liability in that matter, as the settlement also leaves open the possibility of additional costs for medical monitoring or personal injuries. In letters to SEC enforcement chief Linda Thomsen and Alan L. Beller, head of the corporation finance section, the DSFV: - Asked the SEC to compel the company to disclose to investors an array of data, including health and safety testing, about potential liabilities at DuPont facilities that use or produce PFOA. - Sought clarification about when a company's assertions that its products do not harm human health may constitute illegal and "materially misleading communications" to shareholders when there is credible evidence to the contrary. - Raised questions about DuPont's failure to disclose in shareholder reports information about emerging trends that restrict markets for products containing PFOA. Such information would include a recent ban in Canada of three perfluorinated compounds, and government reviews of PFOA in Europe and Australia that could lead to regulatory restrictions. "In the past, DuPont denied in its SEC filings that the fungicide Benlate caused any harm, even after being hit with numerous property and business damage lawsuits," Lewis said. "The Benlate issue has so far cost the company about $1.9 billion to fight or settle the lawsuits. We fear that the company could be repeating this pattern with PFOA." In April, DSFV sponsored a shareholder resolution calling on the company to reveal attorney fees, expert fees, lobbying, public relations and other hidden costs associated with PFOA. Company officials opposed the resolution. The DSFV also commissioned a study by Lewis that examined DuPont disclosure activities and shareholders' rights to information. The study anticipated that company executives' failure to keep investors duly informed of liabilities could have a dramatic impact on DuPont's bottom-line. The DSFV coalition owns more than 28,700 shares of DuPont Co. stock. Members include the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE), the United Steelworkers of America (USWA), the Sisters of Mercy Merion Regional Community in Merion, Pa., and Green Century Capital Management of Boston. In April 2005, PACE and the USWA merged to form the United Steelworkers (USW), the largest industrial union in North America. For copies of the letter to SEC officials and further information about the DuPont Shareholders for Fair Value coalition, go to http://www.dupontshareholdersalert.org
SOURCE DuPont Shareholders for Fair Value
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