ABB ABB Ltd

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.

"The company has checked and reconfirmed the balances of its global bank accounts and can confirm that this situation is limited to South Korea," ABB said.

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 had risen over 6% so far this year, through Tuesday.

In a research note, analysts at Morgan Stanley said they didn't expect the theft 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.

ABB employs 900 workers in South Korea, according to the company's website.

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 03:22 ET (08:22 GMT)

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