AgFeed Industries, Inc. announced that its board of directors has established a special committee to investigate the accounting relating to certain of the company’s Chinese farm assets (acquired during 2007 and 2008) used in its hog production business, as well as the validity and collectability of certain of the company’s accounts receivables relating to its animal nutrition business in China and any other issues that may arise during the course of the investigation.
The special committee is comprised of directors Milton P. Webster, III and Bruce Ginn, a newly appointed director, as described further below. The special committee is authorized to retain experts and advisers to carry out its investigation and has engaged Latham & Watkins LLP to serve as its independent counsel in connection with the investigation.
The company does not intend to provide further comment regarding the matters under investigation until after the special committee concludes its investigation.
The company also announced that the Board of Directors appointed Bruce Ginn as a director on September 25, 2011. Mr. Ginn has extensive experience in the agriculture and livestock industries.
Mr. Ginn is currently a Partner at BMI Ag Services, an agriculture holding and consulting company that focuses on livestock production and sales and operates pork processing companies, and the Chief Executive Officer of the Kansas City Sausage Company, LLC. Previously, Mr. Ginn held a number of executive positions at Oscar Mayer/Kraft, ConAgra and Sparks Commodities Inc.
Mr. Ginn has also served on the faculties of a number of universities, including Texas Tech University and Colorado State University. Mr. Ginn holds graduate and undergraduate degrees in agricultural economics. As previously announced on July 15, 2011, the company has entered into non-binding letters of intent to acquire Kansas City Sausage Company, LLC and Pine Ridge Farms, LLC. Mr. Ginn has an ownership interest in these companies and currently serves as the CEO of Kansas City Sausage Company, LLC.
The exclusivity periods for each of these letters of intent has been extended to December 1, 2011. The Company has halted negotiations and anticipates finalizing negotiations for these transactions following the conclusion of the special committee’s investigation.