(NaturalNews) DuPont, the maker of the Pioneer brand of genetically modified corn, has been sued by an investment fund over claims that company managers promoted herbicide-resistant crop traits that they were aware did not work.
The suit was filed by the Ironworkers District Council of Philadelphia and Vicinity Retirement and Pension Plan. The plaintiffs contend that both past and present directors at DuPont wasted corporate assets while fraudulently promoting a specific gene trait known as GAT. The suit was filed in Delaware Chancery Court, Bloomberg News reported.
Prior to filing the suit, lawyers for the plaintiffs issued a legally defined "demand" on Wilmington, Delaware-based DuPont's board "to investigate and commence an action" against executives and directors, according to court papers.
In response to questions from Bloomberg News about the suit, DuPont spokesman Dan Turner said that "several months ago, DuPont's Board of Directors unanimously rejected the shareholder derivative claims" after reviewing the findings of an independent investigation by former Delaware Chancellor William Chandler, as well as two independent DuPont directors. Turner noted that the claims made then "were not supported by the facts or the law and that pursuing those claims would not be in the best interest of DuPont."
Whose GMO seed is better?
The gene trait in question, GAT, came from DuPont's attempts to develop products that allegedly increase crop yields, including the genetic engineering of seeds to make plants more resistant to herbicides aimed at killing weeds instead of crops.
As Bloomberg News reported:
According to court papers, DuPont in 2002 took licenses from Monsanto Co. to use its Roundup Ready trait, which helps crops resist otherwise harmful effects of Monsanto's Roundup herbicide. By 2005, DuPont decided to develop its own trait -- GAT.
"With great fanfare," DuPont announced to the world in 2006 that it would begin selling the GAT (glyphosate acetolactate synthase tolerance) gene trait three years later, in 2009. The company anticipated initial sales of about $200 million a year, the court complaint says. GAT seeds are supposed to be genetically altered to tolerate the class of weed killers known as ALS herbicides.
But soon, "field trials of GAT were producing disappointing results," said the investment fund, but DuPont "continued to publicly hype GAT" and "conceal the failure."
In 2009, the biotech giant revealed that it would add one of Monsanto's genetic technologies used to make crops resistant to its herbicide, because the combination appeared to boost crop yields. But Monsanto, eager to protect its own GMO seeds, sued DuPont; a federal jury in St. Louis awarded Monsanto $1 billion in damages in August 2012.
'Not an objective analysis of the record'
According to the fund lawsuit, as a result of wasteful mismanagement, "the company was sanctioned by a federal judge and millions of dollars were spent on attorneys' fees and other expenses," as directors "failed to institute and maintain adequate controls" which then damaged the company.
Following the judgment, DuPont appointed an "evaluation committee" to look into claims that were being made by shareholders, Bloomberg News said, adding that the DuPont board retained the authority to take any action. The committee summarily issued a report in late November, then provided it to the fund's attorney.
"The report is not an objective analysis of the record and relevant evidence," the fund said. It doesn't "provide an objective and reasoned analysis on which the board could reasonably rely."
The Ironworkers are accusing DuPont of civil fraud and negligent and intentional misrepresentation, as well as waste of corporate assets and breach of fiduciary duties.
Defendants include Ellen Kullman, DuPont's chief executive officer; and directors Eleuthere I. du Pont and Lamberto Andreotti, who is also CEO of Bristol-Myers Squibb, Bloomberg reported.