Austal USA Agrees to Million Dollar Penalty in Fraud Case – Company Outlook Remains Positive

The military shipbuilder Austal has agreed to pay a fine of $24 million to settle an investigation into accounting fraud. This move is considered by the company's management as the best possible outcome. Austal USA, a subsidiary of Australia-based Austal Limited, pleaded guilty to one count of securities fraud and obstruction of a federal audit. The $24 million fine also includes compensation for shareholders who were harmed by false financial information. John Rothwell, former chairman of Austal Limited and current non-executive board member, emphasized the extensive governance changes and internal controls implemented to prevent future incidents. "Upon becoming aware of this issue, Austal conducted an independent investigation," Rothwell said. "The responsible individuals are no longer with the company." The investigation by the U.S. Department of Justice revealed that Austal USA misled shareholders and investors about the company's financial status between 2013 and July 2016. To meet revenue forecasts, cost estimates were artificially kept low, leading to an inflated profit image. As part of the settlement, Austal USA will engage an independent compliance monitor for three years and implement a comprehensive compliance and ethics program. According to the U.S. Department of Justice, the funds will be distributed to affected investors by the U.S. Securities and Exchange Commission. Despite the scandal and financial sanction, Austal remains optimistic. Rothwell expressed confidence in the company's future and emphasized the importance of focusing on upcoming contracts.