Craig Perciavalle, who led one of Mobile’s largest workforces as the president of Austal USA, resigned today as part of “separate but related” investigations by federal regulatory authorities into the Littoral Combat Ship (LCS) program prior to 2016.
According to a news release from the company, the Department of Justice and Securities and Exchange Commission were investigating company profit reports, component procurement and billable labor hours. Austal hired independent attorneys to review the matter and while corrective action “appropriately rectified the financial impact of these issues …. following the completion of the investigation, the Austal USA Board has accepted the resignation of the Company’s U.S. President, Mr. Craig Perciavalle.”
“Austal and Austal USA are engaging with the relevant U.S. regulatory authorities regarding these investigations,” the statement read. “It is not possible at this stage to predict what action (if any) they may take in relation to these matters. However, the company is confident that the proactive steps it has already implemented to strengthen its internal reporting and compliance practices will be taken into account in determining whether there are any potential consequences arising from matters identified by the investigation, as well as ensuring such circumstances do not happen again.”
The statement went on to assure “the company’s relationship with the U.S. Defense Department remains strong” and noted it is currently working on a $100 million investment with the Defense Department to implement steel ship building at Mobile’s existing aluminum shipbuilding facilities.
In the meantime, Austal appointed current Austal USA Chief Financial Officer, Rusty Murdaugh, as interim Austal USA President while it undertakes a search for a permanent president. Murdaugh was named CFO of Austal USA in March 2017.
“The commissioning of the externally-facilitated investigation and changes already implemented, including the expansion of internal compliance and governance functions in the USA, demonstrate the seriousness with which Austal is taking this issue and its determination to meet and exceed its global risk and compliance responsibilities,” the statement concluded.
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