Vestas reveals Norremark deals could cost EUR18 million

DENMARK: Vestas has announced it is terminating its severance agreement with former chief financial officer and deputy CEO Henrik Norremark, citing unauthorised deals costing the company "up to EUR 18 million".

Norremark dismissal by Vestas in February was one of a number of boardroom changes brought about by CEO Ditlev Engel. This included chairman Bent Carlsen and deputy chairman Torsten Rasmussen.

Vestas said the latest decision was taken after the company's management became aware of two agreements made by Norremark in India last year without approval by the board or Engel.

In a statement, Vestas said: "[Norremark] 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. Through his dispositions, he appears to have caused Vestas a loss of EUR 4m, possibly up to EUR 18m.

"By all appearances, the EUR 4m has been lost, since Henrik Nørremark has waived this amount as part of one of the agreements, while it is being examined to which extent the other EUR 14m, which has been transferred to two Indian companies, might be reversed."

Vestas has not revealed any other details about the agreements.

Vestas chairman Bert Nordberg said: "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."

In February, Vestas said Norremark had been dismissed after the board "received a thorough briefing on the conditions which, during the last months, have led to profit warnings". He had only been deputy CEO for a month.

Last week, Vestas revealed it would be making substantial cutbacks to its Indian operation.