gategroup announced it has completed an investigation into a fraud incident in the company, concluding it was an isolated case of theft by the managing director of Gate Gourmet Northern Europe. The executive has been dismissed. gategroup forensic accounting experts report the total amount of the fraud over the three-year period was CHF22 million, the majority of which occurred prior to 2010. The estimated cash shortfall at the end of 2010 was in the region of CHF10 million before recovery. The group’s cash balances at the end of 2010 were CHF459 million.
The underlying business of gategroup was not affected and the company reports it is performing in line with expectations. gategroup shares declined 5.6% yesterday, as shares fell across the board for airport duty free and retail operators.
Selected Duty Free daily share price movements (% change): 25-Feb-2011