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ABB uncovers US$100m Korean fraud as suspect goes missing
[ZURICH] ABB Ltd said it has uncovered a "sophisticated" case of fraud at a subsidiary in South Korea that will cut last year's results by an estimated $100 million.
The local treasurer, who went missing Feb 7, is suspected of forging documents and colluding with third parties leading to embezzlement and a misappropriation of funds, the Zurich-based company said in a statement.
The latest fraud case adds to the pressure on Chief Executive Officer Ulrich Spiesshofer, with ABB already conceding ground to its activist investor Cevian Capital by offering them a seat on the board at the forthcoming annual general meeting.
ABB earlier this month already said it's being investigated by the UK Serious Fraud Office after the discovery of improper payments related to the subject of another criminal probe.
"While this is unfortunate, we do not expect any major lasting impact," Vontobel analyst Panagiotis Spiliopoulos wrote in a note to clients.
"ABB has a proven stringent cost discipline and strong management commitment to further unlock value."
Shares of ABB traded 0.4 per cent higher at 23.24 francs as of 9.07am in Zurich.