Super Micro Computer Inc (NASDAQ:SMCI) announced that an independent investigation is underway following the recent indictment of three former associates in connection with alleged export-control violations.
Last month, the US Justice Department charged two former employees and a contractor over allegations they routed US-made servers through Taiwan to Southeast Asia, then smuggled them into China.
The company itself is not named in the indictment and has stated it is not accused of any wrongdoing. The charged individuals no longer have any relationship with the company, Supermicro said.
The investigation is being led by two independent board members: Scott Angel, Lead Independent Director, and Tally Liu, Chair of the Board’s Audit Committee.
The board has retained law firm Munger, Tolles & Olson LLP to support the investigation. MTO, in turn, has engaged AlixPartners as an independent consultant to provide expertise in forensic accounting and audit investigations. The firms will coordinate closely with Supermicro’s auditor, BDO USA, and report findings directly to the independent directors.
Supermicro has also launched an internal review of its Global Trade Compliance Program, led by General Counsel Yitai Hu. Newly appointed acting Chief Compliance Officer DeAnna Luna will report to the General Counsel, with all findings forwarded to the independent directors.
The company said it does not intend to comment further until the investigation is concluded.
Wedbush analysts said the investigation “should provide some confidence that this effort is comprehensive and unbiased in nature,” noting Angel’s background of 37 years at Deloitte, including 25 as an audit partner, alongside his relatively short tenure at Supermicro.
The analysts added that, at least in the near term, the March news regarding the indicted employees “is not having a significant impact on operations.”
However, Wedbush cautioned that there remains potential for customers, suppliers, or creditors to adjust relationships, creating uncertainty around the company’s intermediate- to longer-term outlook.
The analysts also questioned how a successful resolution might influence Supermicro’s future, noting that while past accounting controversies led to relatively minor operational changes, it remains unclear whether external stakeholders will find a less dramatic resolution acceptable.
Shares of Supermicro traded up 1.3% at about $23 on Wednesday morning, having fallen more than 21% so far this year.