SEC Opens Probe After Dow Chemical Firings
The U.S. Securities and Exchange Commission is probing whether two Dow Chemical executives engaged in unauthorized talks to sell the company, according to a source close to the matter.
Dow , the largest U.S. chemical maker, last month fired a top executive and a board member, accusing them of engaging in unauthorized discussions to sell the company.
The Midland, Michigan-based company accused Romeo Kreinberg, head of its specialty businesses and Pedro Reinhard, a senior adviser and board member, of engaging in a "business activity that was highly inappropriate."
The company had earlier this year been the subject of numerous leveraged buyout rumors.
Both men have denied the allegations and have sued Dow.
A spokesman for Dow declined to comment. A spokeswoman for Reinhard also declined to comment on the probe. Representatives for Kreinberg and the SEC could not be reached immediately.
The Securities and Exchange Commission inquiry, which is still in the informal stage, may also look at a deal that Dow pursued, according to a report on the New York Times Web site.
Last fall, Dow made an overture to buy DuPont in a deal worth more than $40 billion, the paper said. DuPont never engaged in negotiations, the paper said.
The U.S. securities regulator is also looking into unusual trading in Dow's stock that may have resulted, according to the article.
The paper also said that JPMorgan Chase, one of Dow's banks, had reached out to several private equity firms to inquire about their interest in a buyout of the company.
The SEC has sought information from Dow, Kreinberg and Reinhard, the paper said. It is also seeking information from JPMorgan about the work the bank had done, the paper said.
Representatives of DuPont and JPMorgan were not immediately available to comment.