(Reuters) - Shares of oilfield services firm ProPetro Holding Corp fell as much as 10% on Thursday after investment researcher Culper Research released a report outlining business dealings among its executives and board members, and criticized an internal audit into disclosures and related-party transactions as a “farce.”

FILE PHOTO: A piece of equipment stands in the ProPetro yard before being sent to a fracking site where it will be used to coax oil from underground, in Midland, Texas, U.S., on April 12, 2018. REUTERS/Ann Saphir

Culper, which said it was short ProPetro’s stock - meaning it will profit if shares fall - outlined a network of companies formed by senior managers, and questioned some directors’ independence.

ProPetro was not immediately available to comment.

Shares fell were off 80 cents at $7.75 on Thursday.

Reuters this month reported that ProPetro was under investigation over its financial disclosures by the U.S. Securities and Exchange Commission. The fracking services company earlier said its board was examining accounting disclosures, internal controls and expense payments to top executives.

In early October, the firm’s audit committee released a report into its investigation that prompted it to reshuffle management and demote its co-founders. The committee said it was continuing to look at related-party real estate transactions.

ProPetro’s securities filings this year disclosed its offices were leased from a business owned by Chief Executive Dale Redman, and that it had leased other properties from businesses jointly owned by senior executives. The company also rented equipment from another Redman company.

ProPetro also purchased $10.3 million of frac sand last year from a mine located on the property of an oil and gas company in which Redman is a 44% owner, making him the indirect beneficiary of roughly $300,000 in royalties, the regulatory filing showed.

Culper’s report outlined a web of companies that named Redman, former CFO Jeffrey Smith and other ProPetro executives as affiliates. Some share common addresses or phone numbers as ProPetro’s headquarters.

The report also called into question the independence of the audit committee and ProPetro’s board members. It said Alan Douglas, a member of the board’s audit committee, is Redman’s personal accountant and a signatory on multiple businesses affiliated with company’s executives.

Culper said the company has employed executives’ family members over the past two years, even as it recently cut its workforce by 9.5%. Redman’s son-in-law works as a sales manager for ProPetro, while Chief Operating Officer David Sledge’s son runs investor relations and former CFO Smith’s daughter is controller. Last year, those relatives made a combined $1.59 million, according to Culper.