Chesapeake Energy Corporation (NYSE:CHK) has encountered another predicament to add into its current woes. The Ohio based Energy firm is subject to scrutiny after the state’s pension fund realized losses, which Attorney General Mike DeWine suspects is linked to Chesapeake operations.
The AG is skeptical about the practices of the firm and thinks that the company’s chief executive officer, Mr. Aubrey McCLendon could be defrauding the investors for personal gain.
The citizens of Ohio had earlier expressed concerns over Chesapeake’s trading activities, citing possible cases of fraud. Speaking in a letter to Ohio Citizen Action, DeWine said, “My office is reviewing the retirement system trading data in order to calculate possible losses attributable to the alleged fraud.”
He also promised to closely monitor the situation and verify the cause. DeWine promises to take ‘necessary action’ if he finds that Ohio resources have been lost due to fraudulent activity, Business Week reported.
Ohio Citizens Action is adamant that Chesapeake’s current activities if left unchecked could lead to a situation like the Enron saga; a position the body would not want to entertain with Ohio Citizens pension fund at stake. The executive director of Ohio Citizen Action, Sandy Buchanan, expressed the approval of DeWine’s pragmatic measures by saying, “We’re definitely glad to see (DeWine is) taking this very seriously.”
It is interesting that no blame has been assigned to the pension fund for investing in the company.
According to Biz Journals, this quandary comes after the firm recently laid off 70 workers based in Texas, and with plans to name a new Chairman within the next few weeks, after the former Chairman Stepped down in response to the intensified scrutiny.
Nonetheless, Chesapeake still stays focused in its core business, and is currently pursuing oil exploration in Kansas. The firm also claims unassailable leasehold land ownership of approximately 1 million acres, way above its competitors.