Danish wind turbine major Vestas Wind Systems has fired its Chief Financial Officer, Henrik Norremark, over two deals in India that happened in 2011.
Vestas believes that Norremark acted beyond his powers and caused the company a financial loss of at least Euro 4 million (Rs 27 crore).
A press release issued by Vestas on Tuesday mentions no details of the two India deals, nor does it specify the nature of the alleged misconduct by the CFO. It says that in one deal the financial loss to Vestas is Euro 4 million. The other deal is being investigated, but Vestas believes that the loss here could be as much as Euro 14 million (Rs 95 crore). The company is examining as to what extent these two deals could be reversed.
“The reason for this unusual step is that the management of Vestas has become aware of two agreements in India concluded by Henrik Nørremark on behalf of Vestas in the autumn of 2011, which neither the board nor the CEO knew about. Henrik Nørremark seems to have entered into these agreements in violation of the company’s internal provisions regulating his power to bind the company as well as the company’s interests in general,” says the release.
Henrik Noreemark’s severance agreement has been revoked and Vestas has asked its lawyers to make further investigations.
“We have not yet taken a position on whether there are grounds for legal claims. It is a complex investigation which is going on; so any legal claim will depend on the legal assessment of any additional information, which it is possible for auditors and lawyers to obtain during the investigation process,” the Vestas release says.
One of the earliest entrants into the Indian wind energy sector and once a market leader in India, Vestas’ sales in India has not been up to the mark. In 2011-12, for instance, the company came fifth in sales ranking, when a three-year-old company called Regen Powertech, occupied the third position.
Citing “tough conditions” in the global wind industry, Vestas recently said in a email response to Business Line that it had decided to scale down India operations.