(Bloomberg) -- S&P Global Ratings downgraded FirstEnergy Corp. and its subsidiaries, citing the dismissal of Chief Executive Officer Charles Jones in relation to a bribery scandal.
The ranking was cut two steps to BB+ from BBB, S&P said in a statement. The company and its subsidiaries remain on CreditWatch with negative implications, it said.
“We view the severity of these violations at the highest level within the company as demonstrative of insufficient internal controls and a cultural weakness,” the ratings company said.
Ohio-based FirstEnergy fired Jones and two other senior executives after a board review in the wake of a federal corruption scandal found they had violated the company's policies and code of conduct.
FirstEnergy's violations were “significantly outside” of industry norms and they represented a “material deficiency” in the company's governance, S&P said. It expects to resolve the CreditWatch placement in coming months pending the results of various investigations, criminal allegations and civil suits.
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