Monsanto to pay US$80m to resolve SEC accounting claims

[NEW YORK] Monsanto Co will pay US$80 million to settle a US regulator's claims that the company improperly accounted for certain expenses tied to customer rebates for weed-killer Roundup.

The world's biggest seed company booked revenue from the discount program without properly recognizing all of its costs, the Securities and Exchange Commission (SEC) said in a statement Tuesday.

Three accounting and sales executives also agreed to pay penalties to settle allegations against them, the agency said.

SEC chair Mary Jo White made enforcing accounting rules a priority when she joined the agency in 2013 after the number of such cases declined in previous years.

In June, the regulator fined Computer Sciences Corp US$190 million for manipulating financial results and clawed back pay from former executives.

"Monsanto devised rebate programs that elevated form over substance, which led to the booking of substantial amounts of revenue without the recognition of associated costs," said Scott Friestad, associate director in the SEC's enforcement division.

Also in connection with the settlement, chairman and chief executive officer Hugh Grant, and former chief financial officer Carl M. Casale reimbursed the company for cash incentives and some stock awards they received in the company's 2009 and 2010 fiscal years, Monsanto said in a separate statement.

After losing market share to generic competitors, Monsanto's sales force told retailers that if they maximized Roundup purchases in the fourth quarter of 2009, they could participate in a new rebate program the following year, according to the SEC.

While the incentive led to higher sales, Monsanto delayed recording the costs associated with it until 2010, the agency said.

"Corporations must be truthful in their earnings releases to investors and have sufficient internal accounting controls in place to prevent misleading statements," Ms White said in the statement.

The St Louis-based company, which settled with the SEC without admitting or denying wrongdoing, agreed to hire a consultant to examine its accounting controls and policies.

BLOOMBERG