ABB ‘fraudster’ missing in Korea scandal

SWISS engineering firm ABB today braced for a $100 million

(£80 million) hit after uncovering a “sophisticated criminal scheme” in its South Korean subsidiary.

The company said significant embezzlement and misappropriation of funds came to light when the unit’s treasurer went missing earlier this month.

The individual is suspected of forging documentation and colluding with third parties to steal from the firm, ABB said.

The firm, whose products are used in everything from robotics to power grids and works on the Underground, has drafted in independent forensic and legal specialists as part of an internal investigation and is working with law enforcement. Checks on its bank accounts confirmed the situation was limited to Korea.

The scandal comes days after the Serious Fraud Office opened an investigation into suspected bribery and corruption at ABB’s UK subsidiaries in relation to a probe into energy services company Unaoil.

ABB said the alleged fraud in South Korea will affect its 2016 results, which showed the first rise in quarterly orders in almost two years.

@clarehutch