CEO QUITS IN WAKE OF BOOKINGS FRAUD AT PANALPINA
- Latest News
- Thursday, 27 July 2006
In a prepared statement issued by Panalpina, the forwarder said the negligent employee in question, who has been with the company for more than 20 years, deliberately and systematically circumvented internal control mechanisms. He managed to hide own incurred losses by manipulating the booking records over a period of 14 months. The manipulated figures were discovered in mid December by the respective management and the employee has been released. An internal investigation which has also involved representatives of the group auditors, PricewaterhouseCoopers, has revealed the extent of the total loss, confirming the manipulation of booking records to be an isolated incident. At this point in time, there is no indication of an unjustified personal enrichment of the said employee.
Despite this one-off incident, Panalpina is expecting consolidated net earnings for 2005 which exceed the previous year's result.
A spokesperson said the incident would have a negative impact on the operating results for 2005 in the region of CHF 22m and of the respective 2004 results of some CHF 11m.
Following the outcome of an internal investigation, a decision has consequently been made to put an immediate stop to losses caused by the employee. In addition, internal controlling and organizational measures have been strengthened to ensure that this remains an isolated incident.
The Board of Directors has decided to press criminal charges against the negligent employee. Following Bruno Sidler's resignation, chairman Gerhard Fischer has taken over the CEO position on an ad interim basis.
