Imtech begins the healing after €370m write-off
Technical services giant apologises to shareholders, customers, suppliers and staff after probe uncovers irregularities in numerous projects
Imtech is hoping to close a "dark chapter" in its history with the publication of a 96-page report detailing the "unethical and undesirable" business behaviour that led it to write off €370m on recent projects.
The pan-European technical services monster, which employs about 2,300 staff in the UK, announced in February that it would breach its lending covenants after uncovering financial irregularities across four big Polish projects.
The revelations triggered Imtech to carry out a wider investigation into its business, which unearthed further irregularities relating to its German operations. It also led Imtech to conclude that its business controls had not worked adequately and its corporate culture was "sub-optimal and too much focused on good news only".
The offending German and Polish projects led Imtech to write-off €370m in its fiscal 2012 results - which it delayed publishing until today - pushing it to a €226.3m net loss for the year. This is far more than the €100m or so it expected to write off in relation to the original Polish contracts.
The Amsterdam-based firm, which bought UK systems integrator Capula last year and IBM reseller Real Solutions in 2008, said the probe had led it to take a number of corrective actions. This includes management changes in Germany and Poland, the filing of criminal complaints in German and Poland and the implementation of enhanced business controls and an improved governance, risk and compliance framework.
Chief executive Gerard van de Aast, called the release of the astonishingly self-flagellatory report an "important yet sad milestone" for the 30,000-strong firm, which operates across the sectors of ICT and electrical and mechanical solutions.
He also apologised to shareholders, customers, suppliers and partners - as well as its employees.
"The shareholder report has been written with full transparency, since we believe that healing from this dark chapter in Imtech's history must start with openness about the investigations and findings," he said.
"It goes without saying that in the future this kind of conduct will not be tolerated. The corrective actions that have been and are being taken are in our view a clear and necessary response to what happened. Looking forward, Imtech will have to rebuild its reputation and regain the trust from all stakeholders. We will do so with vigour while adhering to the highest business ethics standards."
On a more positive note, Imtech announced its main financiers have agreed to continue to make their current facilities available, albeit under amended conditions, which include restrictions in relation to new debt, acquisitions, disposals and dividend. It also expects to complete a €500m rights issue this summer to help reduce its debt mountain.
Van de Aast concluded: "Imtech must now look forward and implement the recovery plan. Imtech's core value proposition based on its technological capabilities and market coverage is still intact. The people at Imtech will move forward and continue to make serving their customers their top priority."