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U.N. agency head resigns amid investments probe

May 8 (UPI) -- United Nations Secretary-General Antonio Guterres on Sunday accepted the resignation of the head of a U.N. agency under investigation for potentially losing millions of dollars in bad investments.

Grete Faremo, the executive director of the U.N. Office for Project Services, submitted her resignation Sunday after The New York Times published an article detailing how the little-known agency may lose up to $25 million meant for aid to developing countries.

"It has been my great privilege to lead UNOPS," Faremo said in a statement. "I continue to be proud of UNOPS' achievements and unprecedented growth over these last eight years."

The office of Guterres said the U.N. head had accepted Faremo's resignation, effective immediately, and appointed Denmark's Jens Mandel to active executive director of UNOPs starting Monday.

"The secretary-general is grateful for Ms. Faremo's commitment and dedicated service to the organization," the statement said.

The U.N. watchdog Office of Internal Oversight Services has been investigating possible misconduct at UNOPS concerning its Sustainable Infrastructure Investments and Innovation initiative that is designed to help address the two issues of financing and innovation in connection to achieving the U.N.'s Sustainable Development Goals.

In December, Faremo had placed Vitaly Vanshelboim, the chief executive of S3I and her deputy, on administrative leave amid the U.N. watchdog's investigation.

The Times reported that UNOPS had given tens of millions of dollars to a British man whose businesses have defaulted on more than $22 million in loans.

In a statement from mid-April, UNOPS said it "accepts there are challenges with" its initiative and that "funds are at risk" but none to date have been lost.

"UNOPS will pursue all available legal remedies to protect its operations and assets, including the recovery of outstanding payments owed to UNOPS," it said. "UNOPS is committed to a rigorous and comprehensive process to address any possible misconduct and maladministration claims and will hold all persons responsible to account."

Faremo, who had announced in March that she was to retire in September, said Sunday that while they still don't know all the facts about what occurred, "they occurred on my watch and I acknowledge my responsibility and have decided to step down."

"I hope my decision will allow UNOPS to focus on its vital work uplifting the lives of vulnerable people around the world," she said.

Chris Lu, the U.S. ambassador to the United Nations for Management Reform, called on the U.N. to immediately release the complete investigation report into the possible wrongdoing.

"At a minimum, we believe that UNOPS leadership missed clear warning signals, failed to provide necessary oversight and took unacceptable risks with funds," he said on Twitter.

"There needs to be a comprehensive review of UNOPS' business model, governance structure and personnel," Lu added in a second comment. "The new UNOPS leader also needs to demonstrate a strong commitment to reform."