Nutritional products maker Herbalife Ltd. (HLF) said Tuesday that its board of directors has appointed PricewaterhouseCoopers LLP as the company's independent auditors.
In April, KPMG LLP resigned as the independent auditor for Herbalife following alleged insider trading by one of its former senior partners. The former partner is said to have provided inside information of the company in exchange for money to an outsider who used it to trade stocks.
Herbalife noted that KPMG has stated its resignation as independent auditor was not related to Herbalife's financial statements, its accounting practices, the integrity of Herbalife's management, or for any other reason.
Herbalife has filed a Form 8-K, indicating that the audit committee of its board has engaged PricewaterhouseCoopers or PwC as the auditor, after an extensive evaluation process.
PwC will commence work immediately to re-audit Herbalife's consolidated financial statements for the fiscal years ended December 31, 2010, 2011 and 2012. In addition, PwC will review the company's condensed consolidated financial statements for the first quarter of 2013.
Leroy Barnes, chairman of Herbalife's audit committee said, "We are very pleased to have engaged PwC to serve as the Company's independent auditor. They will begin work immediately to re-audit the Company's December 31, 2010, 2011 and 2012 consolidated financial statements. Investors should rest assured that the Company will be working to assist PwC in any way necessary to facilitate their work."
A multi-level marketing company, Herbalife sells an array of weight management, nutritional supplement, energy, sports and fitness, and personal care products. The company has been the center of attention for investors ever since Pershing Square Capital Management LP's William Ackman took a large short position in Herbalife and dubbed the company as a pyramid scheme as well as doubted its business model.
However, activist investor Carl Icahn has come to the company's rescue, taking a stake in Herbalife and putting two representatives on the company's board of directors. Icahn has said Herbalife has a legitimate business model, with favorable long-term opportunities for growth. Third Point LLC's Daniel Loeb has also taken a stake in nutritional supplements maker.
HLF closed Tuesday's trading at $50.54, up $1.33 or 2.70 percent on a volume of 10.45 million shares.
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