Finance
Inside Super Micro's wake-up call: After riding the AI wave, the $20 billion tech giant is crashing back to earth amid a financial crisis and family drama
Silicon Valley tech company Super Micro was supposed to be riding high: After flying under the radar for a quarter of a century, the company had ridden the coattails of the recent generative AI boom. The $20 billion manufacturer builds some of the most important hardware used to power the top artificial intelligence models–that is, high-performance servers that house the leading AI chips, including Nvidia’s.
Over the past five years, as the AI boom picked up steam before exploding post-ChatGPT, Super Micro’s shares soared over 3,000% and its reported revenue doubled to $7.12 billion, to earn it a glitzy debut on the Fortune 500. But accounting issues have continued to haunt the company: It settled with the Securities & Exchange Commission in August 2020 over two years’ worth of alleged accounting violations, and then in 2024 short-seller Hindenburg Research claimed Super Micro continued to engage in questionable accounting practices.
And now, things just got even more real. Super Micro’s auditor resigned in the midst of its work with the tech firm, a move generally considered to be one of the reddest of red flags in the financial and investment community. And after Super Micro broke that news to investors, auditor Ernst & Young came back with a World Series grand slam rebuttal.
In a letter to the regulators, EY said it only agreed with the company’s disclosures in the first paragraph, the first sentence of the second paragraph, the third paragraph, the first three sentences of the fourth paragraph, and a few others. That’s it.
“We have no basis to agree or disagree with other statements of the registrant contained therein,” EY wrote to SEC commissioners.
For investors, those can be read as fighting words. Super Micro’s stock tumbled 33% on Wednesday.
Governance expert and Georgetown University associate professor Jason Schloetzer told Fortune this type of resignation is unusual and is consistent with a “noisy withdrawal.”
“It’s pretty clear there are irreconcilable differences between management and the auditor that are severe enough to spill into the public domain,” said Schloetzer. “An auditor resignation is already in red flag territory, so this one will certainly get close scrutiny from capital markets participants and regulatory agencies. Management will have some explaining to do.”
What went down at Super Micro?
The auditor’s response was prompted by the disclosure Super Micro made this week announcing EY’s departure. Critically, Super Micro told investors it “does not currently expect that resolution of any of the matters raised by EY, or under consideration by the Special Committee, as noted below, will result in any restatements of its quarterly reports for the fiscal year 2024 ending June 30, 2024, or for prior fiscal years.” Generally, Super Micro’s disclosure that they don’t think these concerns will prompt them to correct their financials is meant to soothe investors that are skittish about potential accounting problems.
The company formed the special committee in question after EY flagged concerns about its financial reporting to the board’s audit committee last July. In response, the board formed a special committee to investigate—and hired law firm Cooley LLP and forensic accounting firm Secretariat Advisors to probe. As of today, that review remains ongoing, according to Super Micro.
In a statement to Fortune, a Super Micro spokesman said it disagreed with EY and added it is working “diligently” to hire a new auditor. The spokesman emphasized that Super Micro does not believe it will need to issue any restatements or corrections to its financials.
Accounting expert Francine McKenna told Fortune that the EY resignation went beyond the usual quiet exit auditors make when they slip away from an engagement. “There are noisy resignations and then there are resignations that bang a big giant gong—and this is as bad as it can get,” said McKenna, who authors The Dig newsletter.
In its resignation letter, EY wrote that it was no longer able to rely on management and the board’s audit committee, which is supposed to be made up of independent directors who oversee the company for the benefit of shareholders. “When you can’t rely on management, that’s bad,” said McKenna. “If you can’t trust the audit committee, there is something very wrong.”
A Super Micro spokesman told Fortune: “We have announced a first quarter business update call for Tuesday November 5th.” Not ideal timing, given that’s Election Day. Super Micro declined to comment further.
Amy Lynch, former regulator with the SEC and Financial Industry Regulatory Authority, told Fortune it appears EY has “serious concerns about the company and contacted the SEC in order keep themselves from being charged in any subsequent enforcement action.”
“SMCI may very soon find itself under investigation by the SEC for accounting-related fraud, if not already,” said Lynch, founder and president of FrontLine Compliance. “The SEC acts very quickly in these circumstances.”
The SEC did not immediately respond to a request for comment.
EY’s abrupt departure is the latest in a pileup of problems at a company considered a Wall Street darling not that long ago. Super Micro got a warning letter from Nasdaq last month after it failed to file its annual financial report on Aug. 29. The stock was still trading on the tech-heavy exchange, but the company was given a 60-day notice to either pony up a 10-K or submit a plan to regain compliance.
Super Micro got an extension until Nov. 27 to deliver on its fiscal year 2024 audited financial statements. The company also implemented a 10-for-1 forward stock split that took effect Sept. 30, increasing its authorized shares from 100 million to 1 billion. Stock splits are commonly used to make shares more affordable to investors because it lowers the price per share. Nvidia did a split this year also. It can also boost liquidity and flexibility in equity compensation. Super Micro CEO Charles Liang’s salary was revised in 2021 to just a dollar a year and all his comp was converted into performance-based stock options, according to the company, with potential value of $60 million.
What’s up with the short report?
In August, famed short-seller Hindenburg Research hit the company with a 19,000-word short report. It claimed to have found “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures” after a three-month investigation. Super Micro described the report as “false and misleading” in a letter to investors.
That was after the SEC previously fined the company $17.5 million for alleged improper accounting from 2015 to 2017. Super Micro paid the fine without admitting or denying the findings. Former chief financial officer Howard Hideshima was also fined in the action—and cofounder and CEO Liang, while not charged with misconduct, had to repay the company $2.1 million in stock profits he received while the accounting errors were occurring—a compensation clawback.
It likely required a lot of heavy lifting from the audit committee. During 2018, the committee met 42 times, 38 of which were special meetings. In 2020, it met 15 times, with 11 special meetings. The grand total for the past three fiscal years is 47 audit committee meetings. On average, according to data from governance benchmarking analytics firm Esgauge, S&P 500 audit committees met about eight times a year for the past three years.
Super Micro: A family affair
The company was founded in September 1993 by board chairman and CEO Liang and his wife, Sara Liu. A third cofounder, Yih-Shyan (Wally) Liaw was involved until January 2018 when he resigned all his positions as the company dealt with regulators following a previous audit committee investigation. But, as of May 2021, Liaw was back, advising Super Micro on development. He returned to full-time employment in August 2022 and rejoined the board in December 2023, according to the company’s most recent proxy report.
The company also involves multiple family relatives in its business entities, based on its disclosures. At least two sisters-in-law work at the company and a third loaned $12.9 million (plus interest) to Liang. The company’s most recent disclosure showed that he owed her $16 million.
Cofounder Sara Liu’s brother, Hung-Fan (Albert), works for the company; Sara Liu’s sister-in-law, Shao Fen (Carly) Kao, works there; Sara Liu’s other sister-in-law, Mien-Hsia (Michelle) Hung, also works there.
In October 2018, Liang personally borrowed the $12.9 million from Chien-Tsun Chang, the spouse of his brother Steve Liang (also Charles Liang’s sister-in-law). Charles needed it to pay back margin loans to two financial institutions that had been secured by Super Micro’s stock, the company’s disclosures state. The loans were called in after Nasdaq suspended the stock from trading on Aug. 23, 2018 after Super Micro failed to file multiple quarterly and annual reports with the SEC. It was delisted from the Nasdaq Global Select Market and quoted on the OTC Market. It was relisted on the exchange on Jan. 14, 2020.
From there, the disclosed inter-company transactions and business relationships get even more complex. Super Micro has entered into a series of agreements with a Taiwan corporation called Ablecom Technology and one of its affiliates, Compuware Technology, according to Super Micro’s financial filings.
Super Micro outsources server design and manufacturing to Ablecom Technology. In fiscal 2023, Super Micro bought $167.8 million in products from Ablecom, and as of June 2023, Super Micro owed Ablecom $36.9 million. Super Micro also paid Ablecom $12.1 million for “design and tooling” in fiscal 2023, according to Super Micro.
There’s another family relationship in that mix. The CEO of Ablecom is Steve Liang, brother of Charles, per Super Micro’s financial disclosures. The complexity intensifies from there—according to Super Micro’s most recent proxy statement, Steve Liang and his family own 28.8% of Ablecom. Charles Liang and his wife Sara Liu own 10.5% of Ablecom. Bill Liang (brother of Steve and Charles) is on Ablecom’s board and is CEO of the other entity involved, Compuware. (Neither Charles Liang nor Super Micro own stock in Compuware and Super Micro doesn’t own stock in Ablecom or Compuware. Ablecom owns less than 50% of Compuware, the company reported.)
Furthermore, Ablecom’s sales to Super Micro make up a “substantial majority” of its net sales, the company disclosed. For the fiscal years ended June 30, 2023, 2022, and 2021, Super Micro bought products from Ablecom totaling $167.8 million, $192.4 million, and $122.2 million, respectively. During the same period, Super Micro owed Ablecom $36.9 million, $46.0 million and $41.2 million, respectively. Super Micro paid Ablecom $12.1 million, $8.3 million, and $8.6 million, respectively, for design services, tooling assets and miscellaneous costs, per the company filings.
Meanwhile, Compuware is a distributor for Super Micro in Taiwan, China, and Australia—and Super Micro outsources power design and manufacturing to Compuware. Compuware’s sales of Super Micro products to other businesses make up a majority of Compuware’s net sales. In fiscal 2023, Super Micro sold $36.3 million in products to Compuware and in June 2023, Compuware owed Super Micro $24.9 million. In fiscal 2023, Super Micro bought $217 million in products from Compuware, and in June 2023, Super Micro owed Compuware $66.2 million. Super Micro paid Compuware $2 million for “design and tooling.”
In addition, Super Micro and Ablecom jointly established Super Micro Asia Science and Technology Park in Taiwan “to manage shared common areas.” Each company contributed $200,000 for a 50% ownership stake in the venture, according to the company’s disclosures.
Super Micro says its maximum financial exposure to Ablecom was $23.7 million in outstanding purchase orders as of June 30, 2023, and Super Micro’s maximum financial exposure to Compuware was $46.8 million in outstanding purchase orders as of June 30, 2023.
Super Micro also disclosed that a sibling of Yih-Shyan (Wally) Liaw, a board member and senior vice president of development, owns approximately 11.7% of Ablecom’s capital stock and 8.7% of Compuware’s capital stock.
For now, Super Micro’s spokesman said it will talk with investors on the Election Day call. But in a September letter to customers and business partners, Liang (the CEO and founder, not his siblings) emphasized the accounting delay that impacted its annual report and the Hindenburg issue wouldn’t impair its ability to deliver goods.
“Importantly, however, when we announced the decision to delay our Annual Report filing, we indicated that based on the work done so far, we don’t anticipate any material changes in our fourth quarter or fiscal year 2024 financial results,” wrote Liang. “This is good news. I continue to have strong confidence in our finance and internal teams.”
As the Santa Barbara Unified school board faces a projected $20 million deficit and declining reserves, trustees voted unanimously Thursday night to change who leads the district’s Finance Committee — removing community member Todd Voigt in favor of future boardmember leadership.
The move — approved in Resolution 2024-25-32A — immediately drew criticism from parents, primarily on the Facebook page S.B. Parent Leadership Action Network (S.B. PLAN), who accused the board of consolidating power just as the district’s fiscal outlook grows increasingly precarious.
“This is a power grab,” said Michele Voigt, wife of Todd Voigt and a San Marcos parent who spoke during public comment. “We are at a point of serious financial concern, and the board is reducing independent oversight.”
Voigt urged the board to view the First Interim Budget Report as more than numbers on a slide. “I’m asking you tonight to look at this first interim not as a technical report, but a test of your governance and your duty to the community you represent,” she said. “Your own projections point to reserves falling below the state minimum and trending toward zero within a few years. And no one will be able to say that they didn’t see it coming.”
Despite Voigt’s comments, the district’s interim financial report told a more nuanced story. The district’s chief business official, Conrad Tedeschi, iterated different figures, figures that were part of the long-term financial plan approved by the board. Overall the numbers were not a surprise, emphasizing that the district is not in crisis and remains above the state-mandated 3 percent minimum reserve level.
According to Tedeschi, there are improved revenue projections and a growing deficit. Total revenue for 2024-25 increased to $244 million, up from the adopted budget, driven by higher-than-expected one-time grants, including a major boost to the Expanded Learning Opportunity Program, which rose from a projected $3 million to $5.2 million after the state updated its formula. However, expenditures also climbed, pushing the projected deficit from $15 million to $20 million. Tedeschi said the increase reflects rising labor costs following the district’s recent wage settlement with teachers. Salaries and benefits now account for 81 percent of all district spending.
Despite the shortfall, Tedeschi emphasized that reserves remain above target: currently at 8.52 percent, compared to the board’s adopted budget of 8.92 percent and well above the state-required 3 percent minimum. Multi-year projections show that with planned reductions, the deficit could shrink to $6.7 million by 2027-28, provided the district makes at least $6 million in cuts over the next two years to maintain a minimum 5 percent reserve. “That’s not a satisfactory level for a basic aid district,” Tedeschi said, “but staying above 5 percent is the minimum needed to keep our budget certified.”
Still, there was ongoing tension over who chairs the Finance Committee — centering on concerns about transparency and legal compliance. The board’s newly passed resolution requires that only elected trustees can serve as committee chair, replacing community member Todd Voigt with a boardmember moving forward.
At the heart of the move is compliance with the Brown Act, California’s open-meeting law that governs transparency in public agencies. Under the law, committees subject to the Brown Act must have properly agendized items for any votes or actions to be legal and binding. Board President William Banning said the Finance Committee had previously taken action on items not properly listed on agendas, potentially violating the law and opening the district to liability.
“These amendments reinforce that commitment [to compliance] and position the Finance Committee to continue its work in a way that is focused, lawful, collaborative, and ultimately highly valuable to the board and the community we serve,” Banning said.
The amended resolution changes Finance Committee bylaws to require that only a boardmember may serve as chair, ending Voigt’s tenure. It also outlines procedures for member removal and reaffirms the committee’s advisory-only role.
“I am the Chair of the Finance Committee, maybe for 15 more minutes,” said Todd Voigt during public comment. “I agreed to serve because I care deeply about this community and its future. I’m a volunteer with no political ambitions. My sole purpose is to provide sound advice and expertise for the benefit of our schools.”
Voigt called the resolution a “serious mistake” and warned that removing the independent chair would erode the very trust the district had been trying to rebuild. “If the board controls both the committee and its leadership, that independence disappears,” he said.
He also made a pointed recommendation to the board. “Should this passage occur … I strongly urge the board to select Boardmember [Celeste] Kafri as the chairperson. She has consistently demonstrated a commitment to addressing the district’s financial challenges,” Voigt said. “By contrast… Boardmember Banning opposed a committee goal I proposed to reduce the deficit. Leadership that does not prioritize deficit reduction is unacceptable.”
Board President William Banning, who was formally elected to the role earlier in the evening, defended the resolution and its timing.
“This is a normal part of building effective governance structures,” he said. “The resolution … strengthens Brown Act compliance … clarifies the committee’s strictly advisory role … and ensures that meetings are presided over by a trustee trained in Open Meeting Law and accountable to the public.”
Banning said that while the original intent was to demonstrate openness by appointing a community chair, it had created confusion around agenda-setting and governance boundaries. “That pattern typically follows the line of … a community member is chair in an attempt to demonstrate openness and shared leadership … and then in early meeting experiences, there is agenda-setting confusion, there’s boundary drift, and difficulties with Brown Act procedures.”
Boardmember Kafri pushed back on parts of the resolution, questioning why the committee chair needed to be replaced at all. “Why is it that we need to replace the committee head … because of a misunderstanding about the Brown Act when most of the committee members have never been on a Brown Act committee before?” she asked. “Could an orientation and a better understanding … prevent future Brown Act violations?”
That prompted clarification from Banning: “It is not only common, but standard practice throughout the state of California … that the committee chair be one of the appointed board representatives.”
Boardmember Gabe Escobedo supported Kafri’s interest in making the committee more effective, but reminded the board to stay focused. “More of what Ms. Kafri is talking about is like the mechanics, and I trust that Mr. Tedeschi will be responsive to the needs of the group and be able to present the information in a way that is going to be digestible,” he said. “What I would hope is that we can focus more on just the mechanics of what’s in the resolution — the words.”
The resolution passed unanimously, but not without raising questions about trust, power, and what transparency means when community expertise is asked to sit down.
As Escobedo noted: “We have the fiduciary responsibility…. It only makes sense to direct the work of the advisory committee to aid us in making those really difficult decisions.”
Simply Asset Finance has reported that its total loan origination reached £2bn ($2.6bn) in 2025, following its growth and lending activity during the period.
During 2025, the company’s gross loan book increased to £543m and its customer base grew to 13,000.
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Additional digital platforms came online, and commercial loans were added to the range of available finance solutions.
Improvements in the company’s own technology and stronger results in various regions contributed to increased efficiency in lending operations and a broader local presence for SME clients.
In July, Simply Asset Finance introduced Kara, an AI-powered virtual agent.
Kara uses the company’s past data to enhance user interactions, streamline internal processes, and speed up decisions on lending applications.
Simply Asset Finance CEO Mike Randall said: “Our growth this year has built on the momentum of 2024, and reaching £2bn is a clear milestone for the business. All our channels have driven that progress, with rising demand for specialist lending helping us expand our footprint and support even more SMEs across the UK.
“Despite a year of challenging economic conditions, small businesses have remained resilient and ready to invest. Kara has been central to meeting demand quickly and efficiently – and we expect her value to our customers will only grow.
“As we head into 2026, we’re focused on carrying this momentum forward and working with even more brilliant businesses to unlock their potential.”
Last month, Simply Asset Finance became a Patron lender of the National Association of Commercial Finance Brokers (NACFB).
This partnership is aimed at supporting the broker community in the UK and increasing access to asset finance and leasing products through wider distribution.
The NACFB is known as an independent UK trade association for commercial finance intermediaries, promoting cooperation between lenders and brokers across the sector.
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Baker McKenzie Welcomes Finance & Projects Principal Matthias Schemuth in Singapore | Newsroom | Baker McKenzie
Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
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