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| Insider Stock Trading |
Sonova, the world's largest hearing-aid maker, said Chief Executive Valentin Chapero and Chief Financial Officer Oliver Walker have resigned, while Chairman Andy Rihs will step down but remain on the company's board. Sonova has appointed Alexander Zschokke as interim CEO and Paul Thompson as interim CFO.
The independent investigation, which was conducted by the law firm Homburger, found weaknesses in the company's internal processes, and highlighted that Sonova's top managers failed to issue a timely black-out period for trading in Sonova shares and options in the run-up to the company's profit warning.
The law firm found that there were trades that shouldn't have taken place during that period. Sonova said it has appointed a task force to address the problems.
According to data from the Swiss stock exchange, eight days before the profit warning on Match 16, a non-executive member sold shares worth nearly 40 million francs ($ million), triggering speculation that the chairman, who holds around 10% of Sonova's stock, had sold part of his holding. Other insiders were also reported to have sold shares.
Sonova, the world's largest hearing-aid maker in terms of sales, on March 16 cut its profit and sales outlook for the fiscal year, saying earnings will be hurt by a recall and a product launch delay in the U.S., as well as the strong Swiss franc. Its U.S. unit Advanced Bionics had to stop production of its HiRes 90K cochlear-implant device in December after two patients suffered from severe pain and overly loud sounds.
Although Mr. Chapero, the former CEO, recently said that no new cases have been registered since the recall and the company isn't facing lawsuits due to the problem, Sonova launched a revamp at the firm that is being scrutinized by the U.S. Food and Drug Administration.
Despite the ongoing difficulties, the interim CEO, Mr. Zschokke, said the company "is and remains a superb company. We have top talent and a strong leadership." Mr. Zschokke said new product launches should help the company regain market share, adding the company is "working hard to re-enter the market with Advanced Bionics' cochlear implants."
Sources: http://online.wsj.com
