Auburn Hills-based auto supplier BorgWarner Inc. misled investors about future liabilities for asbestos lawsuits, according to federal regulators, and has settled a lawsuit by paying a $950,000 fine.
The U.S. Securities and Exchange Commission said in a statement that BorgWarner failed to report more than $700 million of potential future asbestos claims in its financial statements from 2012-16. BorgWarner neither admitted nor denied wrongdoing as part of the settlement.
The problem was in how BorgWarner estimated the potential liabilities. "BorgWarner did not conduct any substantive quantitative analysis to estimate these asbestos claims, despite possessing nearly 40 years of historical raw claims data," the agency said in its order.
The SEC said that in early 2017, BorgWarner reported a charge for these claims and, in 2018, BorgWarner restated its financial statements to report the charges in the appropriate periods dating back to 2012, aggregating $703.6 million related to the asbestos claims. BorgWarner also disclosed that its internal controls over financial reporting were ineffective.
BorgWarner, which makes turbochargers and all-wheel drive systems for vehicles, has been named in a number of lawsuits in the past, alleging injuries related to asbestos exposure in certain of its products.
The company said at the time that it did not record the estimated liability prior to the fourth quarter of 2016 due to a material weakness in its internal controls over financial reporting.
"This matter involves BorgWarner’s historical accounting for incurred-but-not-reported asbestos-related claims," the company said in a statement. "The Company corrected any issues with its asbestos-related IBNR accounting in the 2018 restatement. Asbestos accounting is not a concern for the Company going forward."
BorgWarner divested its asbestos liabilities in a 2019 deal with Enstar Holdings LLC, a company that specializes in managing liabilities and related insurance claims.
Asbestos, which can cause certain kinds of cancer, has been a decades-long issue for manufacturers who use the heat-resistant material in their products. That has led to billions of dollars in legal liability from workers, mechanics and customers and numerous bankruptcies.
"pay" - Google News
August 27, 2020 at 04:43AM
https://ift.tt/3jj92W2
BorgWarner to pay $950,000 to settle asbestos accounting investigation - Crain's Detroit Business
"pay" - Google News
https://ift.tt/301s6zB
Bagikan Berita Ini
0 Response to "BorgWarner to pay $950,000 to settle asbestos accounting investigation - Crain's Detroit Business"
Post a Comment