Swiss freight and logistics group Panalpina has announced that chief executive Bruno Sidler has resigned after misconduct by one of its managers.
Business experts say that this resignation is unusual in Switzerland, where bosses rarely leave the ship even if employees have made blunders.
The announcement sent the share price falling by 8.6 per cent in early trading at the bourse on Wednesday to SFr95 from Tuesday's close of SFr103.90.
The actions of the manager led to losses of some SFr33 million ($25.1 million) and will negatively affect the Basel-based company's operating results for the past two years.
Panalpina said the manager, who had been with the company for more than 20 years, was found to have manipulated booking records over a period of 14 months to hide his own incurred losses.
It added that the employee, who has since been fired, "deliberately and systematically circumvented internal control mechanisms". The company has decided to bring criminal charges against him.
According to Panalpina, an internal investigation involving external auditors showed the booking fraud at its Airfreight Management subsidiary to be an isolated incident.
"He [the employee] didn't take the money for himself, but he hid the losses he should have reported, apparently hoping he could turn things around," said Panalpina spokesman Martin Spohn.
The spokesman added that although Sidler wasn't directly involved and not asked by the board to resign, he took responsibility for the incident. He will receive an indemnity equivalent to one year's salary, but the exact figure has not been revealed.
Chairman Gerhard Fischer has taken over the CEO position on an interim basis.
The fraud will cost Panalpina about SFr22 milion in 2005 and another SFr11 million the year before. The company said that internal controlling and organisational measures had been strengthened.
The group, which was only listed on the Swiss stock exchange in September despite being one of the world's biggest logistics specialists, said it still expects full-year net earnings to exceed the previous year's result. Turnover reached SFr7.45 billion in 2004.
Sidler's resignation has come as somewhat of a surprise in Switzerland.
"A CEO taking responsibility for an employee's financial misconduct is very rare here," said Isabelle Reine of Fribourg-based consultants Centre Info.
According to Reine, such an event is far more common in the United States.
"In America, employees are far more aware of the consequences of financial misconduct, and there is more transparency," she added.
While Reine reckons Sidlers' departure is a good thing, she says that he shared some responsibility for what had happened.
"If an employee makes a mistake, his boss is indirectly responsible. Maybe he should have set up controlling measures to avoid this problem."
swissinfo with agencies
Panalpina is the world's second biggest shipper of airfreight and the third biggest of ocean freight.
It has a total of 500 offices in 140 countries.
Panalpina operates directly in 80 countries and is present in 60 others via local companies.
It employs over 13,000 people.
Gross sales were SFr7.4 billion in 2004 and the operating profit SFr153 million.
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