100 Million Stolen in 'Criminal Scheme' at ABB -- 2nd Update
February 22 2017 - 5:22AM
Dow Jones News
By Brian Blackstone
ZURICH--Swiss engineering company ABB Ltd. said Wednesday it
uncovered a "sophisticated criminal scheme" in a South Korean
subsidiary that led to about $100 million being stolen from the
company.
"The treasurer of the South Korean subsidiary is suspected of
forging documentation and colluding with third parties to steal
from the company, " ABB said in a statement.
In a letter to employees, Chief Executive Ulrich Spiesshofer
wrote: "The financial impact of this criminal behavior is one
aspect; even more damaging could be the effect this crime will have
on the reputation of our ABB."
The suspect, who wasn't named by the company, went missing on
Feb. 7, ABB said. A company spokesman said ABB uncovered the theft
on Feb. 9. It is working with the relevant authorities.
A spokeswoman for ABB Korea declined to comment or identify the
name of the treasurer involved. Local police declined to
comment.
The disclosure marks a setback for ABB, which in recent weeks
announced a string of large orders in its power-grids unit
including a $640 million project to deliver an electricity
transmission link in India. Its share price has risen over 7% so
far this year.
Separately, ABB earlier this month said it had unearthed alleged
improper payments following an internal investigation into its past
dealings with oil-services provider Unaoil Group. U.K. authorities
have launched an investigation, which ABB is cooperating with.
In a research note, analysts at Morgan Stanley said they didn't
expect the theft reported Wednesday to have much of an effect on
ABB's 2017 earnings.
"The headlines are clearly not appealing, and there may be some
legitimate investor questions about oversight," the analysts
wrote.
The company said the situation was limited to South Korea, where
it employs 900 workers.
Separately, ABB said it has no
https://mail.google.com/mail/u/0/#inboxminated Lars Förberg,
managing partner at Cevian Capital, as a new board member. Last
year, Cevian was critical of ABB's decision to maintain its
power-grids unit rather than spin it off.
In-Soo Nam in Seoul contributed to this article.
Write to Brian Blackstone at brian.blackstone@wsj.com
(END) Dow Jones Newswires
February 22, 2017 05:07 ET (10:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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