The company behind Ray-Ban and Michael Kors glasses said it has discovered a massive fraud at one of its plants in Thailand.
"Subsidiary Essilor International recently discovered fraudulent financial activities in one of its plants in Thailand," the company said in a statement on Monday. The fraud is likely to cost the business €190 million, but it hopes that what it cannot recover from frozen bank accounts could be recuperated from lawsuits or insurance.
"Essilor International filed complaints in Thailand and in other jurisdictions and mobilised all available internal and external resources to put an immediate end to these fraudulent activities and implement remedial actions," it said.
“It is also carrying out comprehensive investigations, and is taking all possible actions to seek to recover the misappropriated funds in order to mitigate the impact on the group.”
The losses will be recorded in EssilorLuxottica’s 2019 operating results as an adjusted item.
The business said it had fired all staff which it found were involved with the fraud, and is tightening up security worldwide.
"The board of directors of EssilorLuxottica is informed and will monitor closely the situation with the support of advisers; it will examine any further steps to be implemented for any such fraudulent activities not to recur."
Shares in the French and Italian company fell 2.2 per cent to around €136 after the news. The business was created in 2018 when Essilor merged with Luxottica. It includes Ray-Ban, Oakley and Michael Kors among others.
It employed around 150,000 people last year, with revenues reaching €16.2 billion . – Reuters