Vestas Wind Systems A/S (VWS) called in Denmark’s fraud squad to probe deals it says former Chief Financial Officer Henrik Noerremark made in India, which led the turbine maker to set aside $24 million to cover possible losses.
The State Prosecutor for Serious Economic and International Crime became involved in the case in December, Vestas said today in a statement. Lawyers and internal auditors had previously been unable to conclude what the money was spent on, it said.
Noerremark quit in February last year, and Vestas said in October it ended his severance agreement because of two deals he reached in India without the knowledge of the board or Chief Executive Officer Ditlev Engel.
“The Vestas board wants to have all aspects of this case investigated and the missing money returned,” Chairman Bert Nordberg said in the statement. The company hasn’t mentioned the fraud-squad probe until now “out of consideration for the investigation,” he said.
The two deals involve a waiver by Noerremark of two debt agreements with an unspecified Indian company that totaled 4.4 million euros, and a 14.5 million-euro investment in a possible project in India by another company in the group, Vestas said.
“The investigations were completed without the lawyers or the auditors being able to find any further clarification of what the money was spent on,” Nordberg said. “The board requested the fraud squad to initiate an investigation and at the same time we informed the former CFO that the board intends to hold him responsible for the losses.”
Morten Samuelsson, Noerremark’s lawyer, said his client denies the accusations and welcomes the police investigation.
“We’re confident that the police will exonerate him, and then we’ll proceed with a civil case” against Vestas to claim back Noerremark’s severance pay, Samuelsson said today by telephone from Copenhagen.
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