Valeant’s Audit Cop Held Similar Post at a Firm Felled by Fraud – Bloomberg Business

VEA Chairman Robert Monks and Vice-Chair Nell Minow are both quoted in this Bloomberg article about an ad hoc committee member with a past history of serving on an audit committee of a company found to have committed fraud.

Several experts in accounting and corporate governance say Provencio’s time at Signalife is a blemish on her track record as an audit overseer and on the Valeant ad hoc board committee that’s entrusted with assuring investors that the $32 billion drug giant has sufficient controls in place.
“The most important purpose of ad hoc committees is to send a message to the world” that the board is taking concerns seriously to restore shaken investor confidence, said Nell Minow, who co-founded the Corporate Library, a consultant on company governance, and is now the vice chair at ValueEdge Advisors. “You want people who are absolutely and positively squeaky clean,” she said, adding of Provencio’s role: “This does not send that signal.”
In mid-October, Valeant disclosed that U.S. prosecutors had subpoenaed documents related to its drug pricing. A few days later, short-seller Andrew Left said the company essentially controlled Philidor Rx Services, the mail-order pharmacy that has since been cut off, and suggested there could be Enron-like irregularities in the arrangement. Valeant denied wrongdoing in a presentation on Oct. 26, announcing the ad hoc committee that would investigate the Philidor relationship and related matters.
Robert Monks, a corporate governance expert who founded Institutional Shareholder Services before starting ValueEdge, said he wouldn’t automatically consider Provencio unfit for the committee’s inquiries. But he would ask hard questions about her previous time at the defunct company before putting her in such a role. At a small company like Signalife, where Provencio led the audit committee, it’s hard to shake the feeling that “if she didn’t know, she should have known” about the serious lapses, Monks said.

via Valeant’s Audit Cop Held Similar Post at a Firm Felled by Fraud – Bloomberg Business.

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