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
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
"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
SOURCE DuPont Shareholders for Fair Value