Courtesy of Benzinga.
Diamond Foods (Nasdaq: DMND), the embattled food company that saw its shares surged almost 53% on Friday, may be facing more controversy as some walnut growers are questioning payments to them made by Diamond, according to the Wall Street Journal.
Three growers told Diamond they were not going to deliver their 2011 crops to the company, but Diamond told the growers they could cash their checks anyway, the Journal reported. Already under pressure due to questions surrounding its accounting practices, shareholders said the company may have used the payments to move costs from the previous fiscal year into the current fiscal year.
It is those accounting questions that have hampered the company’s $2.35 billion acquisition of the Pringles potato chip brand from Ohio-based Procter & Gamble (NYSE: PG), the world’s largest consumer products company.
Last month, it was revealed Joseph P. Silveira, a member of the board of directors of Diamond Foods, reportedly committed suicide and speculation. Silveira was a member of Diamond’s audit committee.
A KeyBanc analyst said in a note on Friday that the accounting investigation would be completed soon. The investigation will confirm that the momentum payments were properly booked, the Journal reported, citing the analyst.
Shares of Diamond plunged roughly 30% in the last two weeks of November, but following Friday’s rally, the stock up more than 10% in the past month.
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