Bronte Capital Calls For Valeant Board Member To Resign

In a new blog post, Bronte Capital analyst John Hempton explores some inconsistencies in Valeant Pharmaceuticals Intl Inc VRX’s facts regarding board member Norma Provencio’s involvement in Heartronics/Signalife prior to her tenure at Valeant. After Provencio left Heartronics/Signalife, the company was exposed as a major fraud, and company executive Mitchell Stein went to prison.
 

In a press release, Valeant addressed the role that Provencio, who serves as the head of Valeant’s board’s Audit Committee, played at Signalife. “With respect to Signalife, Ms. Provencio served as a member of the Board of Directors and chair of its Audit Committee from July 2005 to June 2007,” a Valeant press release read.

However, Hempton has since uncovered documents revealing that the original round of funding for Signaife precursor Recom Managed Services came exclusively from Norma Provencio and Mitchell Stein back in May of 2003.

“So Norma Provencio - chair of the Audit Committee of Valeant – was in business with the convicted crook from the inception of the criminal business and over two years prior to what Valeant press-releases as her involvement,” Hempton writes.
 

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According to Hempton, either Provencio misled Valeant about her involvement with Stein or Valeant is misleading shareholders.

Regardless, Hempton believes it’s time for Valeant to cut ties with Provencio. “Norma Provencio should resign from the Valeant board,” he concludes.

Disclosure: the author holds no position in the stocks mentioned.