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ABB Uncovers Criminal Activity

ABB Uncovers Criminal Activity

GENEVA (AP) — Swiss engineering company ABB says that an executive at its South Korean unit is suspected of leading a “sophisticated criminal scheme” to steal millions of dollars from the company. The scandal could cost it as much as $100 million.

The Zurich-based company says in a statement that the treasurer of the subsidiary, who went missing on Feb. 7, “is suspected of forging documentation and colluding with third parties to steal from the company.”

ABB said it launched an investigation in cooperation with South Korean authorities and Interpol, the international police body. It has confirmed that the “situation” is limited to South Korea.

South Korean police confirmed the suspect’s identity as ABB Korea’s vice president, surnamed Oh. ABB documents show it has an executive in South Korea named Oh Myung-se.

An official at Cheonan SeoBuk police station said Oh left South Korea for Hong Kong on Feb. 4 and is currently being sought by Interpol. Interpol did not comment, nor did it have the name “Oh” in the search database on its public red-notice wanted list online.

The police official, who asked not to be identified because he was not authorized to speak to media regarding the investigation, said the police is trying to locate the suspect and in the meantime is trying to confirm more details.

ABB filed a complaint on Feb. 8 with the police station in the south of Seoul, accusing Oh of embezzling 35.7 billion won ($31.2 million) of the company’s funds. He has been the company’s finance executive for about two years since Feb. 2015.

The company posted the following statement on its website:

ABB has uncovered a sophisticated criminal scheme related to a significant embezzlement and misappropriation of funds in its South Korean subsidiary. 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 February 7, 2017 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. Current estimate is a pre-tax charge of approx. $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.

As a consequence of the ongoing investigation, ABB will publish its 2016 Annual Report latest by March 16, 2017.


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