Occidental Petroleum Corp. has revealed in public filings that it is under investigation by the Securities and Exchange Commission for numerous undisclosed past dealings.
According to the company, the SEC seeks to determine whether Oxy officials and agents lied or failed to disclose to shareholders material information about its domestic and international oil operations, contracts with foreign agents and governments, possible violations of environmental laws, and its accounting and auditing practices.
The SEC, whose probes stretch from Jan. 1, 1975 to the present, also wants to learn if the company entered into secret contracts with its officers and directors, which should have been revealed to stockholders.
While Oxy states it "does not believe it made any such misleading statements or omission of material facts," it adds:
"Accidental is aware that Dr. (Armand) Hammer (chairman of Oxy) obtained undated resignations from a small number of past management directors."
Oxy described the SEC probe in an amended registration statement for a new issue of preferred stock it hopes to use to acquire Mead Corp. of Ohio.
It is the third version of the registration statement that the company has filed since last August when it first announced its plan to take over Mead.
Mead has fought against Oxy's takeover, and the resulting controversy has caused the SEC, the Justice Department and the Ohio Division of Securities to focus on Oxy and the dealings of Dr. Hammer.
According to the current issue of Business Week magazine, Hammer, who in the past has fired several chief executive officers, may oust his current president, Joseph E. Baird, if the Mead merger falls through.
Meanwhile, the justice Department's antitrust division is in U.S. District Court in Dayton seeking to delay the Oxy-Mead merger until it can challenge it in a trial. Justice charges that the merger would be anti-competitive because the two companies have several of the same products and could control the markets.
Hammer and Oxy have history of legal fights with the SEC.
In 1971, the SEC sued Oxy and Hammer for allegedly making false claims about oil and coal discoveries.
In 1974, the commission alleged that it misled shareholders about loses from its tanker chartering operations.
In 1977, the SEC charged Oxy with making unlawful or questionable payments to government officials in the U.S. and abroad.
In each instance, the company and Hammer signed constant decrees, neither admitting nor denying the allegations.
These are civil settlements, but if the offenses are repeated by defendants they can be found in criminal contempt of the court orders settling the civil cases.
Oxy is offering about $900 million for Mead. The deal was first blocked in August by the Ohio securities authorities, who argued that the company failed to disclose fully many of the same financial dealings raised by the SEC.
Since then, the Ohio authorities have said they are satisfied with additional disclosures made by Oxy. But the SEC apparently is not. This means that commission attorneys may deny approval of the registration of the new shares. This, in turn, could delay the offering for Mead.
Oxy, in its filing with the SEC, said it is unable to predict the outcome of the commission's investigation.
But it does say that "such litigation might have the effect of delaying or preventing consummation of the offer" for Mead.
In its suit to block the merger, the Justice Department said that Oxy and mead both produced sodium chlorate, carbonless copy paper and certain types of coal.
Even as Justice seeks to delay the merger, Oxy has said it will move ahead and seek its stockholders' approval of the merger plan.