April 30, 2015 / 3:23 PM / 3 years ago

UPDATE 1-Chile's SQM payment probe delays filing annual U.S. report

(Rewrites throughout with details from company’s statement, context)

SANTIAGO, April 30 (Reuters) - Chilean fertilizer SQM, which is listed in Santiago with ADRs on the Nasdaq, said on Thursday it was unable to file the company’s annual report with U.S. regulators on time because of an internal investigation into possible illicit payments.

SQM , the world’s biggest lithium producer, has been embroiled in a scandal over fake tax receipts being used for political campaign financing that has cost both the chairman and chief executive officer their jobs.

The company said in a statement that an annual report had been prepared but had not yet been audited to U.S. standards. The report was compiled before the firing of CEO Patricio Contesse for refusing to cooperate with SQM’s internal probe.

Contesse is in a judicial hearing that could be finalized this week to decide whether or not he will be formally charged. If Contesse is charged, he could face being jailed while he awaits his court case.

The annual report’s delay underlines that the scandal is far from over for SQM, which last week shook up its board to try to convince investors that it was upholding high corporate governance standards.

The company, which was privatized in the 1980s under the dictatorship of Augusto Pinochet and has rights to huge nitrate reserves in the Chilean desert, has said it has identified up to $13 million in payments made between 2009 and 2014 “without sufficient supporting tax documentation”.

Canada’s Potash Corp holds a stake of around 32 percent in the dual share structure, and three seats on the board. Pinochet’s former son-in-law Julio Ponce, who stepped down as chairman last week, owns a controlling stake. (Reporting by Rosalba O’Brien; Editing by Chris Reese and Grant McCool)

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