Washington, 1 June (Argus) — The US Securities and Exchange Commission (SEC) and a federal grand jury have subpoenaed bankrupt biodiesel producer E-Biofuels and its parent company, Imperial Petroleum.
Indiana-based Imperial disclosed the investigations yesterday in a SEC filing. It provided little detail on the motivation behind the probes, but said that if E-Biofuels received improper tax credits for the sale of biodiesel, the results could have a material impact on the company.
The investigations add to the woes of an embattled US biodiesel industry, which is dealing with the loss of a production tax credit that expired 31 December and the emergence of fraud in the market for federal biodiesel credits.
Imperial, which also has an unconventional oil production business, acquired E-Biofuels in May 2010. The biodiesel producer owned a 978 b/d plant in Middletown, Indiana, that used waste greases and oils as feedstock.
E-Biofuels last April filed for bankruptcy and Imperial's chief executive Timothy Jones left the company. His replacement, Jeffrey Wilson, was not immediately available for comment.
Imperial said it received the SEC subpoena on 25 May. The purpose of the subpoena is to determine whether the company violated any federal laws, Imperial said. The SEC is requesting information on Imperial and E-Biofuels, including documents related to biodiesel production and tax credits and incentives from any state or federal agency. The subpoena covers January 2010 to the present, according to Imperial.
On 24 May, a search warrant was executed related to an ongoing grand jury investigation, Imperial said. The grand jury probe covers activities of Imperial and E-Biofuels from January 2006 to present.
“The company intends to fully cooperate with the investigations,” Imperial said.
The SEC and the US attorney's office for the southern district of Indiana declined to comment.
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