Switzerland's ABB hit by $100 million South Korean fraud
Source: Reuters
Swiss engineering group ABB fell victim to a "sophisticated criminal scheme" at its South Korean subsidiary, it said on Wednesday, with the chief suspect an executive responsible for ethics training.
The executive, named by a source in South Korea as Oh Myeong-se, was treasurer and one of two integrity ombudsmen for ABB Korea - to whom staff were supposed to report any ethical concerns - according to an online company magazine available on ABB's Korean website.
He was also the head of compliance at ABB in Korea until 2010, said a source familiar with the investigation, a role that carries responsibility for maintaining legal and ethical integrity.
The executive is suspected of forging documents and colluding with third parties to steal funds, ABB said, estimating it would take a pre-tax charge of about $100 million for the affair, which analysts said raised concerns about its corporate oversight.
Oh Myeong-se disappeared on February 7 and ABB subsequently discovered significant financial irregularities, the company said.
Read more: http://www.reuters.com/article/us-abb-fraud-idUSKBN16114L
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