Cofco Orders Internal Audit as Brazil Executives Placed on Leave
Cofco Orders Internal Audit as Brazil Executives Placed on Leave
(Bloomberg) -- Cofco International Ltd. has ordered an internal audit of its accounts in Brazil as it placed two of its top executives in the South American country on leave, according to people familiar with the matter.
The global trading arm of China’s top food company is conducting the review after rapid expansion meant the Brazil unit, its biggest, lost control of some of its finances, said the people, who asked not to be identified because the information is private. The company is looking into whether the issue, caused by the continued use of old systems, resulted in losses, the people said.
Cofco said last month it had placed Valmor Schaffer, managing director for the grains and oilseeds business in Brazil, and regional Chief Financial Officer Wander Meyer on leave and declined to comment on the reason. The fate of the executives, who ran into major differences working together, will be decided soon, the people said.
Cofco’s Brazil business, which accounts for almost 70% of the company’s employees, grew too fast and financial controls fell short as a result of the use of old systems, the people said. These were a legacy from the integration of Dutch grains trader Nidera BV and Noble Group’s agriculture unit, firms acquired by parent company Cofco Corp.
Cofco Corp. spent about $4 billion on the two acquisitions to form a global trading business able to compete with Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co., the storied traders that have dominated the industry over the past century. Since then, it has faced losses due to the actions of a rogue trader in biofuels and the discovery of a financial hole in Brazil.
A spokesman for Cofco International said in response to questions that the two executives remain on leave and declined to comment further.
To contact the reporters on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net;Isis Almeida in Chicago at ialmeida3@bloomberg.net
To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Nicholas Larkin
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