An employee of Electrolux’s internal bank in Germany has been engaged in unauthorized and irregular trading of forward contracts in currencies resulting in losses of approximately DEM 55 million (SEK 240 million). It is not clear to what extent the Group’s insurance will cover the losses.
According to his own statement, the employee, who worked with foreign exchange transactions, began unauthorized trading in forward contracts in currencies on his own initiative in the beginning of 1999. When the losses increased, he increased the trading volumes. His transactions were not discovered because of manipulative actions.
Electrolux has initiated an investigation with the help of its auditors and legal advisors and will take all appropriate legal actions. An important part of the investigation is to determine responsibilities of the parties involved.
Electrolux will also immediately examine all Group authorization rights. Electrolux has also made the decision to further centralize and formalize all forward contracts to the Treasury Department in Stockholm.
Electrolux’s internal bank in Germany is a cash pool administrator and manages liquidity, short-term borrowings and foreign exchange transactions for imports to the German group of companies.
The Electrolux Group is the world’s largest producer of powered appliances for kitchen, cleaning and outdoor use. More than 55 million Electrolux products (such as refrigerators, cookers, washing machines, vacuum cleaners, chain saws and lawn mowers) are sold each year to a value of approx. USD 14 billion in more than 150 countries around the world.
Further information
For further information please contact Michael Treschow, President and CEO, or Lars Göran Johansson, Senior Vice President Corporate Communications, at +46 8 738 60 00 or lars-goran.johansson@notes.electrolux.se. The Electrolux Press Hotline is available at +46 8 657 65 07.
