ABB replaces South Korean management after $100M fraud

ABB has replaced its senior management in South Korea after an executive disappeared from the business with $100 million.

The company has fired the managing director and chief financial officer in charge of South Korea in the wake of the scandal, which exposed a failure to maintain effective financial controls, reports Reuters

The suspected fraud reduced ABB’s 2016 net income by $64 million after taxes and insurance recoveries.

According to Reuters, ABB’s headquarters in Zurich is reviewing weakness in internal controls which enabled the scandal: “We are reviewing the roles and responsibilities of our staff to ensure a proper segregation of duties and make sure something like this does not happen again,” ABB spokesman

As part of the shakeup SweeSeng Lee has been appointed managing director of ABB in South Korea, with immediate effect, succeeding MK Choi, who has left the company. Rajiv Malhotra has been appointed country CFO.

Source: Reuters