Figures embellished

voestalpine: Criminal charges against two former managers

(Bild: Krone KREATIV/voestalpine, Markus Wenzel)

At the beginning of February, voestalpine revealed internally that figures had been embellished in a Group company over a period of 12 years. Seven months later, all the evidence is on the table. And the steel giant from Linz is now taking the matter seriously, filing criminal charges against two former members of the management of the company in question.

"That's not who we are," emphasized voestalpine CEO Herbert Eibensteiner at the Annual General Meeting in Linz at the beginning of July, when he informed shareholders about the case surrounding the earnings-improving false bookings in a 17-minute presentation.

"It was an isolated case," he told the media and revealed that the investigations by a specialized auditing company and a German law firm had been completed.

48,000 emails viewed, 45 people questioned
The internal investigations were extensive: 45 people were questioned intensively, 48,000 emails were viewed, thousands of lines of receipts and hundreds of postings were checked. The result: "At least two people worked together in a way that did not comply with the guidelines," explained Eibensteiner.

Legal action taken
And the company has now also filed criminal charges against these two former members of the management of the affected Group company in the Metal Forming Division. "The first legal steps have been taken," said the voestalpine CEO.

We have reversed these bookings, which were not lawful, and assume that we will get back the majority of the overpaid taxes. We are now concentrating on further improving our control systems.

Herbert Eibensteiner, Vorstandschef der voestalpine

We now also have a much better overview of the damage caused by the incorrect bookings made over 12 years: After all, the figures had been embellished by 99.5 million euros. "There was no outflow of funds," emphasizes Eibensteiner.

Damage of between two and three million euros
However, voestalpine has paid too much tax during this time: EUR 14 million has already been claimed from the tax office. However, it is assumed that an additional amount in the mid-single-digit millions will be recovered. Ultimately, the damage is likely to be between two and three million euros and is made up of the costs for the investigation, tax consultants and lawyers.

It is still unclear whether the Management Board received excessive bonuses
According to voestalpine, steps to claim these damages are being examined and prepared. It is still unclear whether the Management Board received excessive bonuses during the period in which the incorrect bookings were made. If this is the case, these will be paid back, explained Eibensteiner.

When the case came to public attention at the beginning of June with the publication of the 2023/24 Annual Report, voestalpine was criticized for its overly cautious communication regarding the incorrect bookings. Even the Financial Market Authority became involved, launching an investigation into whether disclosure obligations had been breached.