Panalpina CEO resigns in wake of fraud investigation

SERIOUS MISCONDUCT by a manager at Panalpina Airfreight Management in Basel, Switzerland, resulting in losses of some CHF 33m (R159m), has led to the resignation of Group CEO Bruno Sidler. The employee in question, who has been with the company for more than 20 years, deliberately and systematically circumvented internal control mechanisms, according to a company statement. “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 management and the employee has been released,” the statement reveals. An internal investigation which has also involved representatives of the group auditors, PricewaterhouseCoopers, has exposed the extent of the total loss, confirming the manipulation of booking records to be an isolated incident. Currently there is no indication of an unjustified personal enrichment of the employee, a spokesman added. Following an internal investigation, a decision was taken to put an immediate stop to losses caused by the employee. In addition, internal controlling and organisational measures have been strengthened to ensure that this remains an isolated incident, the spokesman said. The Board of Directors has decided to press criminal charges against the negligent employee. The company still expects consolidated net earnings for 2005 to exceed the previous year’s result. Following Sidler’s resignation, chairman Gerard Fischer has taken over as CEO on an interim basis.