Erik Bomans of Deminor addresses the AGM of Vestas on 3 April 2018


Speech given by Erik Bomans of Deminor Recovery Services
at the AGM of Vestas Wind Systems A/S
held on 3 April 2018 in Aarhus, Denmark

Dear Mr Chairman,

Ladies and Gentlemen,

Last year we were here at the shareholders’ meeting to ask questions about Wind Power Invest A/S, a 100% subsidiary of Vestas, which has suffered important losses.

At that time, the total amount of cumulative losses suffered by Wind Power Invest – at least those that we were aware of – amounted to DKK 1.7 bn.

These losses are not mentioned in the annual report.  The 100% subsidiary Wind Power Invest is not even listed among the company’s subsidiaries in the annual report. So it’s only normal that you as a shareholder do not know about Wind Power Invest and the losses suffered by this company.

Why all this secrecy?

When we asked our question at the AGM last year, Mr. Anders Runevad, CEO, said he was not aware of the amount of DKK 1.7 bn and that the annual report had been audited. So what’s the problem?

So the CEO said he was not aware of DKK 1.7 bn of losses in one of the company’s subsidiaries.  That’s very strange in itself because we are talking about a big amount. What is even more worrying, however, is that after last year’s shareholders’ meeting Vestas subscribed to a capital increase in Wind Power Invest for an amount of … DKK 1.7 bn… to cover those same losses. Hocus pocus, one magic trick and the problems is solved.  But it was still shareholders’ money that was used to cover the losses.

Saying that you’re not aware of DKK 1.7 bn of losses while you are preparing or proceeding with a capital increase to cover those same losses, that is not what I would call being honest.

And what’s more, Wind Power Invest suffered an additional loss of DKK 340m, bringing the total amount of losses in this subsidiary to more than DKK 2 bn. And this does not include any possible losses of the financial year 2017, so the amount could potentially be even larger.

Is it normal that the company is hiding these losses from its shareholders?  No, it is not normal, ladies and gentlemen. An amount of DKK 2 bn of losses is definitively materially relevant, and therefore it must be included in the annual report and the reasons for these losses must be explained in detail.

Since the company is not giving any explanation for the losses, I will give it a try.  The losses that Vestas has suffered through this subsidiary are losses on wind power projects that the company set up to get rid of obsolete inventory. Instead of writing off this inventory when it became obsolete, Vestas transferred the inventory to special vehicles, where it would be sitting for several years. Every year Vestas takes part of the losses on its books, so the losses are spread out over various financial years, in the hope that shareholders will not notice anything.

Do you call this honesty?  I don’t.

This is how this company is dealing with its past accounting problems. By doing so, the problems of the former management become the problems of the current management.  They even become the problems of the company itself, which is very unfortunate, because Vestas is a good company that deserves better.

Every year we have been at this shareholders’ meeting to alert shareholders to the current management’s lack of transparency, and we will continue to do so as long as the company does not draw a definitive line under its past.


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