Switzerland-based power and automation company ABB has uncovered a sophisticated criminal scheme related to a significant embezzlement and misappropriation of funds in its South Korean subsidiary, the company reported.
The treasurer of the South Korean subsidiary is suspected of forging documentation and colluding with third parties to steal from the company. The suspected individual went missing on Feb. 7 and subsequently ABB discovered significant financial irregularities in South Korea. The company immediately launched a full investigation in South Korea engaging independent forensic and legal specialists and collaborating with law enforcement authorities. ABB is working with the local police on the investigation and Interpol’s engagement.
This embezzlement and misappropriation of funds will have an impact on the previously reported unaudited 2016 results. (The company reported 2016 sales earlier this month.) Current estimate is a pre-tax charge of approximately $100 million. ABB has initiated mitigating actions to reduce the impact of this criminal activity on its results significantly including recovery of misappropriated funds, legal claims and insurances.
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 has a zero-tolerance approach to unethical behavior and maintains the highest standards regarding integrity and ethical business practices.