In a recent development, the US Attorney's Office in Manhattan has initiated a probe into the accounting practices of Archer-Daniels-Midland Co. (ADM), according to insiders familiar with the matter. The investigation primarily focuses on ADM's nutrition business, sources revealed on the condition of anonymity due to the sensitive nature of the information.

Following the news, shares of the crop trader tumbled by as much as 4.8% during New York trading hours, indicating growing investor concerns. This investigation stems from ADM's nutrition segment, which recently caused a stir in the commodity world. Last month, the company shook the industry by suspending its Chief Financial Officer, Vikram Luthar, and revising its earnings outlook pending an external inquiry into accounting practices related to the troubled division. Since the suspension was announced, ADM's stock has plummeted approximately 20%.

The US Securities and Exchange Commission's request prompted ADM's internal investigation, and now the involvement of the US Justice Department raises concerns about potential legal repercussions for the company's reporting procedures. The full impact of these internal issues remains uncertain, further exacerbating worries among investors.

ADM has not provided any official comments on the DOJ investigation, with a company spokesperson declining to make a statement. Similarly, the DOJ has also refrained from commenting on the matter.

The scandal surrounding ADM's accounting practices has shed light on the company's decade-long effort, led by CEO Juan Luciano, to reduce its reliance on its traditional agricultural commodities trading business, known for its volatile nature. Luciano envisioned growth opportunities in the nutrition business, leading ADM to make its largest-ever acquisition by acquiring European natural ingredient maker Wild Flavors for $3 billion.

However, the anticipated profits from the nutrition business have failed to meet initial expectations, primarily due to weak demand, including a lackluster market for plant-based foods. While nutrition remains a relatively small part of ADM's overall business, it played a significant role in recent executive bonuses.

In a memo issued last month, Luciano acknowledged that the company's internal investigation revolves around "the transfer of goods and the related financial accounting between business segments." He further stated that these transactions under scrutiny would not have a significant impact on ADM's earnings. Despite this reassurance, the company's market value has dropped nearly $8 billion since the investigation became public.

As a result of the ongoing probe, ADM has delayed the reporting of its 2023 results, further adding to the uncertainty surrounding the company's financial outlook.

It remains to be seen how the DOJ investigation will unfold and what consequences it may hold for Archer-Daniels-Midland's accounting practices. Investors and industry experts will closely monitor the situation as it evolves, eager for further clarity on the impact of these developments on the future of the company.