Swiss engineering group ABB, trying to restore investor confidence after staving off a financial crisis, says it has sacked a handful of London staff who had tried to conceal losses.
Today's statement confirmed previous Swedish newspaper reports that the group had sacked managers in London for having tried unsuccessfully to cover up losses in 1999 and 2000, which ABB had already disclosed in regulatory filings.
The reports came amid growing shareholder disgust over accounting irregularities at big firms from energy trader Enron to telecoms operator WorldCom.
ABB spokesman Mr Thomas Schmidt said the group dismissed "a handful" of London staff in the manufacturing and consumer industries division. He would not give a precise figure.
Internal auditors discovered that costs were understated in order to hide cost overruns that were the consequence of poorly calculated longer-term contracts.
"The internal auditors found out and the faulty amounts never entered our official accounts. There is no need for us to change the annual reports," Mr Schmidt said.
The incident was first unveiled in a filing with US regulators in the 2000 results.
"If we had not discovered these activities, our net income for 1999 and 2000 would have been overstated by $30 million and $10 million, respectively. In 2001, we identified and recorded additional costs amounting to approximately $25 million relating to these activities," ABB added.
"We cannot ensure compliance on a global basis by all of our employees with our internal control policies and procedures."
Staggering pensions benefits awarded to former top ABB executives triggered a wide debate earlier this year about corporate governance.
ABB's detailed SEC filing lists a number of possible legal cases and risks ranging from allegations of corruption to liabilities for asbestos risks and clean-up costs for nuclear sites.