Airplane parts maker fires CEO after he lost $56 million of company money in an email scam

The CEO of the Austrian aircraft parts maker FACC was at the receiving end, as the company fired him after cyber criminals stole some €52.8 million euros ($56.79 million).

Walter Stephan, who served the company as the CEO for 17 years had fallen victim to an email scam this past January that defrauded the company by posing as Mr. Stephan in an email. The hoax email asked an employee to transfer money to an account for a fake acquisition project — a kind of scam known as a “fake president incident”. The scam works when employees break protocol and don’t double-check via phone call or in person if the sender has requested to transfer large amounts of money.

The company said on Wednesday that the firm’s supervisory board decided at a 14-hour meeting on Tuesday to dismiss CEO Walter Stephan with “immediate effect.”

“The supervisory board came to the conclusion that Mr. Walter Stephan has severely violated his duties, in particular in relation to the ‘fake president incident’,” said FACC, whose customers include Airbus, Boeing and Rolls-Royce.

While FACC declined to reveal information of how the scam happened, the company in February had also fired its CFO (Chief Financial Advisor) after the cyberattack. Robert Machtlinger will be replacing Stephan as FACC’s new interim CEO.

On Wednesday, the company disclosed its 2015-2016 financial year results, where it stated that it managed to recoup €10.9 million euros of the stolen funds from being transferred.

The company nonetheless reported total losses of €23.4 million for the 2015-2016 financial year, of which a majority amount was the €40.9 million loss from the online scam incident.