Electrolux, the world's biggest maker of household appliances, has warned that its profits for 1999 would be hit by unauthorised currency trading losses worth £20 million (€25.4 million).

The Swedish company has suspended an employee at its internal bank in the German town of Siegen who began trading in currency futures without permission at the beginning of last year.

The man in his 30s was part of a team responsible for short-term borrowings and foreign exchange transactions to finance the company's German interests. His gamble started to go wrong when the euro slumped from its initial high level in the first few weeks of the year.

Electrolux said the man, who has not been named, claimed he was acting alone and was not attempting to make personal gains, but the company is passing the inquiry on to German police later this week and a criminal investigation is likely to follow.

A senior executive attempted yesterday to play down the extent of the damage to the company's profits, which are expected to be about 6.25 billion Swedish krona (€72 million).

"For the whole year, the impact will be less than 5 per cent," said Mr Lars-Goran Johansson, senior vice-president for Corporate Communications.