January 17, 2007

US SEC sues former execs of ConAgra subsidiary

The Securities and Exchange Commission has sued three former executives of a ConAgra Foods Inc. (CAG) subsidiary, alleging they overstated profits in 1999 and 2000.

James Charles Blue, the former president and chief executive of ConAgra Agri Products Cos., Randy Cook, the former president of North American Operations of United Agri Products, and Victor Campbell, UAP's former controller, were named in the lawsuit filed Tuesday in US District Court.

The lawsuit says UAP's inflated financial results were included in ConAgra's consolidated financial statements and were also reported within ConAgra's Agricultural Products, one of three business segments operated by Omaha, Neb.-based ConAgra at the time.

"The defendants' knowing or reckless misconduct caused ConAgra to file with the commission, and release to the public, materially false and misleading financial statements included in its annual reports filed for fiscal years 1999 and 2000," the SEC said.

The lawsuit says the company overstated income by US$46.7 million in 1999 and US$48.5 million in 2000. UAP accounted for about 13 percent of ConAgra's sales, and 9 percent of the company's profits, during those years.

In 2003, ConAgra Foods Inc. sold its Colorado-based farm supply business to a group led by management and a New York-based investment firm for US$600 million in cash and securities.