By Arunima Kumar
(Reuters) -Chemours shares plunged to a more than three-year low after the chemical maker placed its top three executives, including CEO Mark Newman, on administrative leave and said it was looking into potential "material weaknesses" in its financial reporting.
The internal review also prompted the company to further delay the reporting of its fourth-quarter and full-year results, without disclosing a new date. Chemours earlier this month said it would delay its results to Feb. 28.
"What we think many perceived as likely a relatively minor accounting hangup two weeks ago now appears wider, longer, and with more ramifications than the market initially believed," said Barclays analyst Michael Leithead.
The weaknesses included the effectiveness of the "tone at the top" set by certain members of senior management, the chemicals maker said on Wednesday.
CFO Jonathan Lock and Principal Accounting Officer Camela Wisel were also placed on leave, the company said.
Shares were trading down 42% at $16.58 after being briefly halted for volatility. More than 11 million shares were traded within the first hour of trading, compared with its surpassing a short-term average of over a million shares.
The administrative leave of CEO, CFO and controller is a negative that is compounded by the delay in releasing year-end financials, brokerage Jefferies said.
Chemours named company insiders Denise Dignam as CEO and Matt Abbott as CFO on an interim basis.
Newman, Lock and Wisel did not respond to requests for comment via LinkedIn.
Chemours said it needs additional time to complete the reporting process and added it expects preliminary net sales of about $6 billion for the year ended Dec. 31, compared with net sales of $6.8 billion in 2022.
The company also estimated a net annual loss in the $225 million-$235 million range, compared with a net income attributable to Chemours of $578 million for 2022.