Babcock & Wilcox CEO, CFO Accused Of Fraud Amid $260M Losses
A shareholder complaint against Charlotte-based Babcock & Wilcox Enterprises accused CEO James Ferland and Chief Financial Officer Jenny Apker of concealing and spreading issues while the company accumulated more than $260M in losses.
The new filing is part of the federal class-action lawsuit accusing the company of intent to defraud investors, according to the Charlotte Business Journal.
Thirteen confidential witnesses, most of them former employees, stated in the complaint that senior management was aware of major problems in the company’s waste-to-energy programs.
The company was created in 2015, as a spinoff of Babcock & Wilcox Co. Shortly after the parent company began reporting losses. The new company's stock has fallen in value more than 80% since June 2015. A statement on its website in August announced second-quarter losses of $33.4M, or 8.7%, compared to the second quarter of 2016.
“Our second-quarter financial results reflect a $115.2M charge arising from unexpected cost and schedule issues in the renewable segment,” Ferland said in a statement in August. “We have revamped our go-forward business model for this segment and have also entered into new financing arrangements.”
Babcock & Wilcox Enterprises is a manufacturer of environmental and energy technologies for the power and industrial markets, headquartered in Ballantyne. It improves the environmental friendliness of power generation and pulp and power operations by controlling air emissions and minimizing water usage and discharge. The company employs more than 5,000 people worldwide.