Wilh Wilhelmsen Holding is hoping to recover much of its $17m exposure to an alleged fraud involving one of its subsidiaries.
But the Oslo-listed company has announced a $7m provision connected to the incident on its first-quarter books.
“The fraud case is subject to criminal procedures in four jurisdictions,” the company said in its quarterly report, which provided little detail.
Details are scarce but the provision comes on the books of Wilh Wilhelmsen’s strategic holdings and investment business reporting segment.
That is the passive holding entity for the company’s investments in Wallenius Wilhelmsen and Hyundai Glovis. But it also has operations of its own, including lesser-known WilNor Governmental Services.
WilNor, in collaboration with Wilhelmsen-controlled offshore supply base operator NorSea Group, manages logistics and supply operations for military operations.
However, Wilh Wilhelmsen communications director Benedicte Teigen Gude told TradeWinds that the fraud case has no connection to military contracting.
“The provision was made in the strategic holdings and investments segment as it is a group loss,” she said.
She pointed to limitations on what it could disclose.
“I can confirm that we have been a victim of a serious fraud incident and that criminals have successfully exploited individuals in our organisation to fraudulently obtain funds,” she said.
“As the incident is still under investigation, we are not permitted to comment on specific details.
“We have made a provision of $7m in our first-quarter accounts, still believing we should be able to recover part of the loss.”
As the company is busy with the case, so is law enforcement.
“We are working closely with the police in multiple jurisdictions, have launched our own internal and external investigations, and have further tightened our internal routines,” she said, but added that customers have nothing to fear.
“The incident does not have any effect upon customers or suppliers or our ability to continuously deliver high-quality products and services.”
The fraud came to light in a quarter otherwise marked by surging profits for Wilh Wilhelmsen itself and for its financial shareholdings.
The company reported Ebitda of $44m in the first quarter. The outfit reported total income, as Wilhelmsen refers to its top-line revenue, of $241m.
Wilh Wilhelmsen’s marine services and new energy segments brought in $20m and $31m, respectively, of that Ebitda figure, while the strategic investments and holdings segment erased $8m of it, thanks to the fraud provision.
But the Ebitda figure is only one piece of the bottom line of Wilh Wilhelmsen as a holding company with many joint ventures and financial investments. Profits after tax for the quarter came to $159m — up from $16m a year ago.
That reflects items including a $71m increase in the fair value of a shareholding in Hyundai Glovis, some $61m in earnings from a 37.8% shareholding in Wallenius Wilhelmsen, and a Hyundai Glovis dividend of $13m.
This story has been updated to include information from Wilh Wilhelmsen that the alleged fraud committed against the company was not related to military contracting.
