TCP International completes audit committee investigation
TCP International announced the results of its previously disclosed Audit Committee investigation into certain payments made by the company's chairman, Ellis Yan, and into potential related party transactions involving Ellis Yan and the company's vice chairman, Solomon Yan. The Audit Committee concluded that: the company's historical financial statements omitted compensation expense received by numerous employees directly from Ellis Yan, which totaled approximately $276K. The company's financial statements omitted related party disclosures related to transactions with entities owned or influenced by Solomon Yan. Ellis Yan violated the terms of his Mutual Separation Agreement by contacting or communicating with employees and others in business relationships with the company. The actions of the chairman and vice-chairman resulted in a material weakness in the effectiveness of the company's internal control over financial reporting. The Audit Committee is evaluating remedial actions to address this material weakness. Based upon the company's completion of the investigation and plans to regain compliance with the SEC reporting requirements, the NYSE granted the company an additional extension for continued listing which provides the company until November 25 to file its outstanding reports with the SEC. During the extension period, trading of the company's shares will remain unaffected. The issuance of audited financial statements is dependent upon its independent auditor's ability to complete its audit and issue an opinion with respect to the company's financial statements for FY15.