Chapter 10 - THE BOARD SPECIAL COMMITTEE
Davies Genomics had been negotiating a sale of forty percent of the company to Helix Meridian Partners.
Potential valuation:
$480 million.
Victor’s vendor conflict could affect:
representations,
quality disclosures,
earn-out calculations,
and executive retention.
The board formed a special committee.
Liam was removed from oversight of the investigation because:
he was victim of the false test,
CEO,
and personally involved in bypassing normal laboratory procedure.
Victor was placed on administrative leave.
Naomi Grant became interim operations lead.
Outside counsel reviewed:
sample handling,
vendor contracts,
executive access,
quality incidents.
The findings were ugly.
Not catastrophic.
Important distinction.
Most Davies testing was valid.
The problem centered on:
specific extraction lots,
poor escalation culture,
manual override privileges,
and executive interference.
Victor had repeatedly pushed lab staff to classify certain incidents as operational rather than quality-related.
Why?
Acquisition timing.
Then the committee found:
Ames Biomedical invoices included consulting surcharges unsupported by clear deliverables.
Estimated questionable excess:
$1.9 million over three years.
Not $14 million stolen.
Not every contract fake.
Some product was real.
Some pricing was not defensible.
Then Victor’s family trust interest surfaced.
He had disclosed “family association.”
He had not disclosed the beneficial trust.
That was potentially serious.
Ava sat in Rachel’s office reading the report.
The false paternity test had not been Victor’s primary crime.
It had been his improvisation to keep Liam distracted, emotionally destabilized, and away from a vendor review long enough to get through acquisition diligence.
Cruel.
May you like
Strategic.
And almost successful.
