Austal, the Australian parent company of US Navy shipbuilder Austal USA, will pay a $24 million fine as part of a settlement with the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) following an investigation into allegations that former employees misstated the company’s performance in financial reports. This information was shared in a statement circulated Monday on the Australian Securities Exchange.
As part of the plea agreement with the DOJ, Austal USA has also committed to “certain compliance and reporting obligations.” The company stated, “Austal is in advanced discussions with the US Navy regarding the impact of these issues and is seeking to enter into an associated administrative agreement with the US Navy.” This agreement would outline the remedial measures taken by the company to date, its ongoing commitments to compliance, the provision of access to US Navy representatives to management, future reporting obligations, and the retention of an independent compliance monitor.
The announcement comes in connection with the alleged actions of three former top Austal executives, whom the DOJ has accused of being involved in a multimillion-dollar “accounting fraud scheme.”
In April 2023, the DOJ indicted former Austal USA CEO Craig Perciavalle, finance team member Joseph Runkel, and William Adams, who worked on the Littoral Combat Ship program. Their trial is scheduled to begin in January 2025, according to NBC15 News.
John Rothwell, Austal’s non-executive director and immediate past chairman, noted in the statement that the employees responsible for the misconduct are no longer with the company, asserting that Austal has “made numerous governance changes to prevent similar issues from occurring again.”
Previously, Austal settled an investigation by the Australian Securities and Investment Commission in September 2022, resulting in a penalty of $650,000 Australian dollars.
