To net an investment from Hyundai, Holtec International, Camden, N.J., wanted to lie about its value and about the prospects for its proposed interim spent-fuel storage business, a former Holtec executive alleged.
Kevin O’Rourke, Holtec’s former chief financial officer, said he was fired in 2022 after about a year on the job for refusing to work on what he called a bogus prospectus for Hyundai Engineering and Construction Co. of Seoul, South Korea. The draft prospectus “included numerous false and misleading statements,” according to O’Rourke’s complaint.
O’Rourke made the allegations in a lawsuit filed June 1 with the Superior Court of New Jersey in Camden County. He alleged that Holtec broke state whistleblower law by firing him over his reaction to the prospectus. He seeks a jury trial and unspecified financial damages.
In an email this week, a Holtec spokesperson said O’Rourke’s allegations are “without merit.”
Among other things, O’Rourke alleged that Holtec CEO Krishna Singh wanted the Hyundai prospectus to say that an interim spent fuel storage facility Holtec has proposed building in southeastern New Mexico would break even in about five years, even though the company’s internal projections in 2022 forecast that the venture would lose about $600 million over that time.
The Nuclear Regulatory Commission licensed Holtec’s proposed spent fuel storage facility in May. The company has not broken ground.
O’Rourke also alleged that the draft prospectus for Hyundai included baselessly optimistic valuations and financial projections that “could not possibly be completed accurately in the timeframe demanded” by Singh.
O’Rouke alleged that there was no basis for Holtec to assume, as Singh wanted to, that the company’s Applied Photonix subsidiary would reach $100 million in annual sales in a five-year span. Created after the outbreak of COVID-19, Applied Photonix aims to cleanse air of harmful pathogens using air filters and LED lighting.
O’Rourke also alleged that Holtec believed a proprietary piece of company software was worth more than $225 million when, in O’Rourke’s opinion, it was worth “near zero dollars.”
In his complaint with the state court, O’Rourke said Singh dismissed the ex-CFO’s concerns, telling him in a meeting that he was “just an Accountant, you don’t know anything about business and finance.”
“We have thoroughly investigated these allegations and they are entirely without merit,” a Holtec spokesperson told the Exchange Monitor on Monday. “We look forward to our day in court.”