Raybans-maker EssilorLuxottica uncovers US$213 mil fraud at Thai factory

GENEVA: EssilorLuxottica, the Italian-French eyewear giant that defused an internal power struggle earlier this year, said it was the target of a €190 million fraud at a factory in Thailand.

The company is working to recover the lost funds, and employees associated with the incident, which occurred at an Essilor plant, have been fired, according to a statement Monday.

EssilorLuxottica said it has begun an investigation and filed complaints in Thailand and other jurisdictions.

The newly merged company recently succeeded in smoothing over a leadership dispute that led analysts to worry about a culture clash at the owner of Ray-Ban and Oakley sunglasses.

The scam risks reigniting concerns about how the company is being managed amid potential distractions.

EssilorLuxottica has been plagued by a power struggle since French lens-maker Essilor agreed to combine with Italy’s Luxottica in 2017.

Under the terms of the merger, both companies would have equal representatives on the board until its 2021 annual general meeting.

Simmering rivalries spilled into public view in March, with the two factions clashing over governance issues such as naming a chief executive officer.

To break the stalemate, Chairman Leonardo Del Vecchio, the founder of Luxottica, and Vice-Chairman Hubert Sagnieres, who comes from Essilor, in May agreed to transfer power to their respective deputies.

The loss will be treated as an adjusted item in its 2019 results, EssilorLuxottica said in the statement.

Shares fell as much as 1.8% in Paris, and had risen 26% this year before today.