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Image: voestalpine
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The headquarters of the steel and technology group in Linz
Image: voestalpine
LINZ. The investigation into years of incorrect bookings at the Linz-based steel and technology group has been completed. The damage is in the low single-digit million range.
48,000 emails were evaluated, 45 interviews were conducted with relevant people and thousands of booking lines were checked: The investigation into the accounting scandal at voestalpine has been completed. As reported, the former managing director of a German group company in the Metal Forming division is said to have had incorrect bookings amounting to around 100 million euros made starting in the 2012/13 financial year to improve earnings. In February 2024, voestalpine initiated an investigation by an auditing firm and a German law firm.
The result is now available, as voestalpine announced. The report confirms what has been communicated so far. “All accounting consequences of the incorrect postings have been retrospectively corrected and fully taken into account in the 2023/24 financial statements, there was no outflow of funds, and the initial suspicion against those responsible has proven to be correct,” says CEO Herbert Eibensteiner.
What is new is that not only the ex-manager in question is said to be responsible for the incorrect bookings, but also a second former member of the management of the company in question is said to have been involved. There is initial suspicion of involvement in this case that goes beyond a mere signing of the balance sheets, it is said.
On Tuesday, voestalpine filed two complaints – alleging “uunreasonable presentation of essential information about certain associations” The accountant who made the incorrect entries is said to have contributed to the clarification of the matter. He will not be prosecuted.
Image: Antonio Bayer
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CEO Herbert Eibensteiner
Image: Antonio Bayer
Further investigations are underway: firstly, whether civil action will be taken against the former managers, and secondly, whether excessive bonuses may have been paid to the former managing directors and ultimately also to the board of directors because of the falsified balance sheets. “Discussions about responsibility” are ongoing with voestalpine auditor Deloitte, who audited the balance sheets for years, says Eibensteiner.
According to Eibensteiner, the damage caused by the incorrect bookings amounts to a low single-digit million amount. Previously, the estimate was that the amount would be medium, but the overpaid taxes due to the incorrect bookings will be largely refunded, so that the damage is mainly limited to the consulting costs, which amount to 2.2 million euros.
Voestalpine says that nothing can be said about the managers’ motives. So far, there has been speculation about whether the aim was to present the department in a better light in order to promote their own advancement within the company. As reported, the lawyer for the person concerned has recently rejected the allegations.
Eibensteiner stressed that the incorrect bookings were an isolated case and that other companies had also been checked. The alleged malpractice remained undiscovered for years. In response, the company is working on “further improving the control systems”.
Ad hoc obligation not violated
voestalpine did not communicate the matter openly. No information was given about it at the annual press conference in June. Only research by OÖNachrichten showed that the incorrect entries were briefly mentioned in the annual report. This led to criticism and accusations that voestalpine may have violated the ad hoc obligation for listed companies, i.e. the obligation to immediately provide information relevant to the share price.
The Financial Market Authority (FMA) has carried out a special audit on this matter. In response to an inquiry from OÖN, the authority has now announced that the investigations have revealed “no violation of the ad hoc obligation” – among other things because the quantitatively small effect of the incorrect postings compared to profit and equity, the fact that there was actually no price reaction after the incorrect postings became known, and the fact that none of the analyst reports reviewed (from 15 analysis houses) address the incorrect postings or evaluate them.
However, the FMA emphasises: “In general, it can be said that transparency is an important principle in the capital markets. Even if there is no mandatory ad hoc obligation, in individual cases it may be the right step for issuers to inform investors and the public about facts that could be of interest to them.”
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