The Commission des Sanctions, a unit of AMF, imposed the fine after concluding that the French chemicals group Rhodia, had failed to fully disclose its debt levels in 2001-2003 and had dated a depreciation of deferred tax assets as December 31 rather than June 30 2003.
The Commission also found that the company’s disclosures in October 2003 were inadequate regarding one issue relating to the US company ChiRex that Rhodia bought in 2000.
Complaints concerning the valuation of ChiRex in 2002 and 2003, and the need to depreciate the related goodwill at the end of the first half of 2003 were rejected by the Commission.
Complaints relating to cash flow and disclosures of environmental risks were also rejected, and the Commission failed to find any wrong-doing by Yves-Rene Nanot, currently chairman of Rhodia's board and former chairman of the board's audit committee.
"With this decision, a page of Rhodia's history has been turned," said Jean-Pierre Clamadieu, Rhodia’s chief executive officer. "I want to emphasize the importance I attach to the quality and transparency of the group's financial communications."
There had been speculation earlier this month that the probe involved accounting irregularities relating to the company’s purchase of the UK’s Albright & Wilson as well as ChiRex.
Rita Hillig, spokeswoman for Rhodia, said the company’s statement made it quite clear that the case had dealt with ChiRex and not Albright & Wilson.
($1 = €0.75)