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Vestas has terminated its former Chief Financial Officer’s severance agreement over two deals he signed in India

The Board of Directors of Vestas Wind Systems A/S has  terminated the severance agreement with Henrik Nørremark, former CFO of Vestas.

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. 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 made provisions to cover any potential losses as mentioned above.
The decision to terminate the severance agreement with Henrik Nørremark was made after the Board’s nomination and compensation committee had conducted a thorough audit and legal investigation that brought these dispositions to light.

Chairman of the Board of Directors, Mr Bert Nordberg, says: “The investigations we have carried out so far show that both the previous and the current Board and the CEO have been kept unaware of these transactions.”

Bert Nordberg also emphasises that he is pleased that the company has decided initially to revoke Henrik Nørremark’s severance agreement and 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 company made this information public, as the Danish newspaper Jyllands-Posten, stated that they to publish an article tomorrow, regarding this issue.

One comment

  1. This shows poor corporate governance in place, and is too naive to believe that payments are made without the knowledge of CEO or power of attorney holder in the Company…. every month finance statements are to be signed by CEO and CFO. Every quarter, the project margins must be stated for the Board as part of Management Information system.. .. This is too naive to believe if not foolish / stupid…..If the Management is unaware, then, buyer should not believe this company as nothing is going to come out properly…… or it may be a cleansing mechanism, but, not this way….. the entire team must own the responsibility and then fix problem as one individual can’t fight the battle with a corporate when singled out i.e after milking the cow…..Netherlands (Denmark) is best in Milking Diary and slaughter house technology……

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