ABB-Korea-comes-under-siege
A former financial director causes great distress to ABB Korea. Shown above is a product of ABB. Courtesy of ABB

As far as ABB Korea is concerned, one bad apple is feared to ruin the whole bunch.

In late February 2019, Korea’s financial regulator penalized ABB Korea, the Seoul-based unit of Swiss-Swedish multinational ABB, for improper accounting practices together with three other firms.

As a result, ABB Korea will be prohibited from issuing shares for the next eight months, and overseers will keep a tab on the company, which focus on robotics, automation and heavy electronics equipment, for the next two years.

The mess originated with the outfit’s former financial director surnamed Oh, who embezzled more than $30 million from ABB Korea between 2015 and 2017 and fled overseas.

He is believed to have gone to China via Hong Kong. But his whereabouts are still unknown.

Thorough audit

The case prompted ABB Korea to carry out a thorough audit of its employees in 2017. It looked into all data over the past decade and some claim the company even retrieved deleted data. Last year, it fired 16 people.

Those who lost their jobs argue that the company went too far as it laid off workers for minor violations that involved less than $200.

The dismissed employees brought the case to the National Labor Relations Commission, which ordered ABB Korea to reinstate them. Refusing it, ABB is expected to resort to a lawsuit.

The financial penalty imposed in February is also related to Oh as the Financial Services Commission took issue with the way the company dealt with the aftermaths in its financial statements.

The regulator said ABB Korea failed to properly recognize the embezzled funds and accumulate provisions on its balance sheet, thus ending up over-valuing its assets.

It remains to be seen how ABB Korea will grapple with these problems. With regard to the labor commission’s order, it is expected to proceed with a lawsuits seeking to cancel it.

The company was not available for comments.

ABB is less known to end users because it is not a consumer product maker. But it is a renowned global company and has been one of the global Fortune 500 companies for the last quarter of a century.