NEW YORK, April 26, 2016 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential misconduct at Exterran Corporation ("Exterran" or the "Company") (NYSE:EXTN).
The investigation focuses on whether the Company's Board of Directors and/or its officers committed mismanagement and breached their fiduciary duties. On April 26, 2016, the Company filed a current report on Form 8-K with the SEC announcing that during the preparation of its quarterly report on Form 10-Q for the quarter ended March 31, 2016, senior management of the Company identified possible errors relating to the application of percentage-of-completion accounting principles to specific engineering, procurement and construction ("EPC") projects in the Middle East by its Belleli subsidiary during 2015. The Company further stated that "management promptly reported the matter to the Audit Committee of the Company's Board of Directors, which immediately retained counsel, who in turn retained a forensic accounting firm, to initiate an internal investigation."
Additionally, according to the Form 8-K, on April 21, 2016, "the Company's management and the Audit Committee of the Board of Directors determined, based on the preliminary results of the internal investigation, that the Company's consolidated and combined financial statements for 2015 and related report of independent registered public accounting firm should no longer be relied upon as a result of material errors, and possible irregularities, relating to the accounting for certain Belleli EPC contracts. Accordingly, Exterran's consolidated and combined financial statements for 2015 will be restated. While management believes the errors identified to date, related to Belleli's application of percentage-of-completion accounting principles to certain EPC projects in the Middle East, materially affect only the 2015 consolidated and combined financial statements, the Audit Committee's internal investigation remains ongoing, and it is possible that additional errors affecting other periods, including interim periods, could be identified. As a result, management has not determined whether any other financial statements should be restated or the amounts of any required adjustments to its previously reported financial statements."
The Company further advised that "following the completion of the internal investigation, the Company will file amended periodic reports for any periods being restated. The Company's management and the Audit Committee have discussed the matters disclosed in this report with Deloitte & Touche LLP, the Company's independent accountants. Exterran has notified the Securities and Exchange Commission and the New York Stock Exchange of the events described in this report."
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