Rica Foods and its subsidiary Costa Rican chicken producer Pipasa are under investigation by the U.S. Security and Exchange Commission (SEC) regarding potentially undisclosed transactions. The American Stock Exchange (AMEX), where Rica Foods is publicly traded, is also in the process of removing the company from its stock listings.
The transactions in question were allegedly between the company, former CEO Calixto Chaves, his affiliates, and the Nicaraguan poultry company Industrias Avicolas Integradas, S.A. (Indavinsa), according to a statement from Rica Foods. These transactions allegedly involved both the purchase of property from Chaves and Pipasa financially guaranteeing funds for Indavinsa.
Rica Foods is fully cooperating with the SEC inquiry and is also conducting an internal investigation, the statement said. Chaves led Rica Foods from August 1996 to July 2005.
AMEX – the second-largest stock exchange after the New York Stock Exchange (NYSE) – is taking steps to remove Rica Foods from its listing because the company failed to file its annual report on time, according to the Rica Foods statement. The company was unable to do so because of the investigation. It has appealed the removal.