ABB, which on Wednesday reported major losses of $691 million (SFr1.17 billion) for 2001, is calling on two former chief executives to pay back large benefits they received when they left their positions.This content was published on February 13, 2002 - 11:09
ABB said on Wednesday that it was assessing undue pension and other benefits worth some SFr233 million ($138 million) paid to former CEOs Percy Barnevik and Göran Lindahl.
The board of directors said Barnevik had received some SFr148 million in pension benefits after his resignation in 1996 and Lindahl's pension and other benefits amounted to some SFr85 million.
It described the approval procedures for these benefits as "unsatisfactory" and added that the group would seek restitution of amounts paid in excess of its obligations.
It said it would be discussing the matter with Barnevik and Lindahl and hoped the matter could be settled amicably.
"The numbers are surprisingly high. There's no doubt about that," ABB CEO Jörgen Centermann told swissinfo. However, he had no further comment to make.
The news came as ABB reported a disastrous year which saw losses mount to $691 million. On Wednesday, the company said there would be no shareholder dividend this year.
ABB's poor fortunes are due in large part to its exposure to asbestos lawsuits in the United States. Last month, the company said it had taken a $470 million charge to increase its provisions against possible claims from former workers and clients related to a US unit.
Centerman, described 2001 as the most difficult year in ABB's history and said he saw little sign of an economic recovery in 2002.
He said he aimed to cut another $1.5 billion from the company's debt over the next twelve months. ABB has shed 7,200 jobs so far from an announced redundancy programme of 12,000 and Centerman said he aimed to conclude the re-organisation as quickly as possible.
He said he would not exclude further changes and divestments in the coming year.
"I want to reduce the debt," he said, "but it is clear I won't let go of the crown jewels."
"Our focus will clearly be on operational performance which is the only way that will bring this company to the glories that we want it to have. I feel very certain that we will turn in a solid profit at the end of this year," he told swissinfo.
In a reaction to the optimism about the future, analysts at Merrill Lynch were wary.
Our key concern is these results would be the prospects for the Financial Services division, they said in a statement.
"With activities in reinsurance, project finance and securities trading, we think there is significant risk to profits in a business that is forecast to make up to 33 per cent of profits for the group this year, they added.
swissinfo with agencies
This article was automatically imported from our old content management system. If you see any display errors, please let us know: email@example.com