Global agribusiness giant ADM’s stock dropped sharply following the company’s announcement on 22 January that its chief financial officer, Vikram Luthar, had been placed under administrative leave amid an investigation into accounting practices in its nutrition segment, World Grain wrote on the same day.

The company’s stock price fell by 24% on 22 January, marking its largest one-day percentage decline since 1929, World Grain reported on 23 January. The stock closed at US$51.69/share, its lowest level since February 2021.

Luthar had been placed on administrative leave following a Securities and Exchange Commission (SEC) “voluntary” request for documents, the report said.

ADM’s external legal advisers and board audit committee were looking at accounting practices in its nutrition segment, including intersegment transactions.

“The board takes these matters very seriously,” ADM lead director Terry Crews said.

“Pending the outcome of the investigation, the board determined that it was advisable to place Mr Luthar on administrative leave. The board will continue to work in close coordination with ADM’s advisers to identify the best path forward and ensure ADM’s processes align with financial governance best practices.”

The firm cut its 2023 profit forecast and delayed its fourth-quarter results due to the investigation, World Grain wrote.

Luthar was promoted to CFO in April 2022 and had been with ADM since 2004.

Ismael Roig, an executive who was president of both Europe, Middle East and Africa operations and president of animal nutrition at ADM, had been named interim CFO.

The nutrition segment was once the fastest growing and most profitable segment of ADM, World Grain wrote, accounting for US$468M of the company’s US$4.67bn operating profit in the first nine months of 2023.

ADM had posted a string of record earnings due to favourable crop processing margins and strong demand for food, animal feed and biofuel, World Grain said.

However, it had cut its adjusted earnings forecast to US$6.90 per share for the fiscal year ended December 2023 from an “excess of US$7 a share” earlier.

ADM’s ag services and oilseeds and carbohydrate solutions units would report results in line with expectations it had given in the third quarter, the company was quoted as saying.