An accounting scandal at a Caterpillar mining-equipment unit in China helped lead to the departure of a senior executive, a person familiar with the situation said.
The world’s largest maker of construction and mining equipment disclosed late Friday afternoon that it would write down the value of a Chinese mining-equipment subsidiary, ERA Mining Machinery Ltd., by $580 million.
It blamed “accounting misconduct” at ERA designed to overstate profitability before it was acquired by Caterpillar last June for about $700 million.
Caterpillar said in a separate statement that Luis de Leon, a vice president responsible for mining products, was “leaving the company to pursue other opportunities.”
That departure was partly related to Caterpillar’s displeasure over problems at ERA, though de Leon wasn’t being accused of accounting misdeeds, according to the source.
De Leon couldn’t be reached for comment. He joined Caterpillar in mid-2011, when the company completed its $8.8 billion purchase of Bucyrus International, a Milwaukee-based maker of mining equipment where he had been chief operating officer.