voest CEO clarifies

Accounting scandal causes rumblings among shareholders

Due to the accounting scandal in a German company, voestalpine - here CEO Herbert Eibensteiner - has to be prepared for uncomfortable questions.

(Bild: Krone KREATIV/Daniel Scharinger, Foto Kerschi)

Four weeks after the accounting scandal at a metal forming company came to light, the voestalpine Annual General Meeting is being held in Linz. The bosses of the steel group will have to face uncomfortable questions. CEO Herbert Eibensteiner made one thing clear at the beginning: the overpaid taxes can no longer be reclaimed! Damage in the millions.

"The case of the incorrect bookings has attracted a lot of attention in recent weeks and, in my opinion, has put voestalpine in the wrong light in the public eye. We are not like that," Herbert Eibensteiner made clear right at the beginning of the voestalpine Annual General Meeting at the Design Center in Linz.

Specific audits of comparable Group companies have not revealed any earnings-improving false postings. From today's perspective, the case should be viewed as an isolated incident. Our control systems are generally well set up.

Herbert Eibensteiner, Vorstandschef der voestalpine im Rahmen der Hauptversammlung am 3. Juli 2024

The figures are said to have been embellished over a good ten years
The tension before the meeting with the shareholders was high. Because there was rumbling among the investors. The trigger: the fact that the figures at a company in the steel group's Metal Forming division had allegedly been fudged for a good ten years. The earnings-improving accounting and asset valuation errors amounted to around 100 million euros.

Investigation of the case costs around 1.5 million euros
And since Wednesday morning, it has been clear that the steel group can no longer reclaim the overpaid taxes. They are time-barred. This has resulted in a loss in the mid single-digit million euro range. The investigation of the case will also cost voestalpine around EUR 1.5 million, which will be spent on lawyers, consultants, auditors and forensic experts.

Cheating with figures always calls for transparency and ethics. The communication gaffe has already got things off to a bad start.

Florian Beckermann, Vorstand Interessenverband für Anleger

Bild: IVA – Interessenverband für Anleger

Eibensteiner spent almost 17 minutes explaining the developments surrounding the incorrect bookings and emphasized once again that there had been no direct outflow of funds.

How will the shareholders react? Investor Rupert-Heinrich Staller had announced in advance that "there will be a lot of questions about this": "How big is the damage really? How could it even come to this?" says Florian Beckermann from the investor interest group, who speaks of a "communication disaster".

The accounting scandal was covered by voestalpine in the 2023/24 Annual Report from page 112 onwards. The affair has been public knowledge since the report was published on June 5, and was uncovered internally in February.

"This is a fresh wound"
Has the dust already settled? "No", says Beckermann, "this is a fresh wound".