Gategroup Holding AG fell the most in five months after reporting a 22 million Swiss-franc ($23.5 million) fraud at a subsidiary.
The world’s second-biggest in-flight caterer dropped as much as 8.7 percent, and was down 2.75 francs at 47.25 francs by 10:21 a.m. in Zurich trading. That gave the company a market value of 1.24 billion francs.
External forensic accountants determined the fraud occurred over the past three years, mostly before 2010, Gategroup said in a statement on Tensid newswire. The crime resulted in an estimated cash shortfall of about 10 million francs at the end of last year, it said. Full-year results will probably be in line with targets, Gategroup said.
“The fraud case is clearly unpleasant,” Rene Weber, an analyst with Vontobel Holding AG with a “Buy” rating on the stock, said today in a note to clients. “We clearly believe it is an isolated issue and therefore a one-time item.”
Gategroup has been “able to identify and understand in detail” how the fraud was carried out, Chief Executive Officer Guy Dubois said in the statement, which gave no details. “Significant recovery of assets has already happened and will continue.”