Vehicle interior parts specialist Collins & Aikman Corp. on Friday disclosed that it was conducting an inquiry into transactions between the company and two of its directors, and also posted a quarterly profit, Reuters reported.
The supplier of convertible tops, instrument panels and other automotive parts reportedly said its audit committee was investigating assertions by two former executives concerning transactions between the company and affiliates of company director Elkin McCallum, and a related potential accounting implication, but did not elaborate.
The company said in a statement that its senior management believes all of the assertions by the former officials are without merit, Reuters said.
The news agency noted that Collins & Aikman’s independent auditors, KPMG LLP, said they would be unable to complete their review of the company’s second-quarter results to be included in a federal filing before the audit committee’s inquiry is completed.
The audit committee is also reviewing non-accounting issues concerning the company’s acquisition of Becker Group from Charles Becker, who is also a Collins & Aikman director, and other people, Reuters added.
According to the news agency, the Troy, Michigan-based supplier said it made a second-quarter net profit of $US10.7 million, or 13 cents a share, compared with a net loss of $23.1 million, or 33 cents a share, in the same period a year ago, when the company took a charge for a stock repurchase.
Net sales fell to $1.03 billion from $1.09 billion, Reuters added.
The news agency noted that, on Monday, Collins & Aikman named former Reagan administration budget director David Stockman, the company’s chairman, to the additional post of chief executive, replacing Jerry Mosingo, who resigned after just one year on the job.