Vestas Discovers $16 Million Fraud at Spanish Subsidiary

By Christian Wienberg

Jan. 16 (Bloomberg) -- Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, said it uncovered a 90 million kroner ($16 million) fraud at its Spanish unit.

Vestas has notified the authorities in Barcelona of the case, which involves current and former employees who made false invoices for nonexistent services, the Randers, Denmark-based company said today in a stock-exchange statement.

Spain was Vestas’ third-biggest market measured in installments in the first nine months of last year, behind the U.S. and China. Vestas said today that it discovered the accounting irregularities at the end of last year, and that losses won’t affect its previously stated profit forecasts.

“This is a dreary and very unfortunate matter, where trusted employees apparently have betrayed the trust and the responsibility they have been given,” Chief Executive Officer Ditlev Engel said in the statement.

Vestas slid as much as 2.7 percent after the company announced details of the case. The shares recovered to trade 8 kroner higher at 308 kroner as of 12 p.m. in Copenhagen.

The fraud was detected with the help of a “whistleblower system,” introduced a few years ago to make it easier for employees to report irregularities to senior management, Engel said in the statement.

The unidentified suspects set up companies investing in wind turbines “with the aim of laundering the money derived from illicit appropriation,” Vestas said.

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net