Ikea founder admits to secret foundation
Published: 26 Jan 2011 12:24 GMT+01:00
Updated: 26 Jan 2011 12:24 GMT+01:00
Ikea founder Ingvar Kamprad, considered one of the wealthiest people in the world, controls the company through a secret foundation worth 100 billion kronor ($15.34 billion), according to a Sveriges Television (SVT) report.
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Despite the revelation, the company and Kamprad's image will probably not be affected, according to media advisors.
Kamprad controls the enterprise through a holding company called Inter Ikea by way of a secret foundation in Liechtenstein. The foundation is currently worth about 100 billion kronor, according to the latest episode of SVT's Uppdrag granskning investigative news programme, set to air on Wednesday evening.
Ikea is controlled through a complex network of different types of companies and foundations.
According to Uppdrag granskning, Kamprad, who has lived in Switzerland for over 30 years, created the foundation Interogo in Liechtenstein in the spring of 1989. The foundation is managed by the law firm Marxer & Partner.
In an email from Ikea sent to the TT news agency, Kamprad admits that the Interogo Foundation in Liechtenstein exists and that it owns Inter Ikea Holding SA, which in turn owns Inter Ikea.
"Interogo Foundation is a company foundation whose only goal is to invest in the expansion of the company business and secure its long-term survival. In other words, the assets of the Interogo Foundation are held as financial security and are only used if Inter Ikea has financial difficulties," wrote Kamprad.
"The assets can also be used to support individual Ikea dealers who have financial difficulties or for philanthropic purposes. Interogo Foundation is controlled by my family and is administered by a board of directors consisting only of outside representatives." he added.
Liechtenstein's rules and regulations are extremely closed. And the bylaws of the foundation clearly state that documents about the foundation cannot be shown to outsiders or foreign authorities.
Proceeds can be paid out through grants to individuals or organisations that work in architecture, as well as interior design and consumer products. Interogo currently has 100 billion kronor in equity, acting as a hidden fortune for Kamprad.
The regulations also clearly stipulate that the Kamprad family has total control over the executive board of Inter Ikea, which is registered in the Netherlands.
For many years, Kamprad has said that his influence over the company is limited and that a Dutch charitable foundation, Stichting INGKA Foundation, directed it.
However, it is Inter Ikea, which the Kamprad family controls through Interogo, that owns the rights to the Ikea brand, its concepts and all of the products sold in its stores around the world.
A large part of Inter Ikea's proceeds comes from the 3 percent in royalties on all sales that every Ikea store must pay to the parent company for the right to use the concept. These payments are tax-free and are amount to several billion kronor per year.
Ikea currently operates in 38 countries. In Sweden, the arrangement amounts to 100 million kronor a year in lost taxes, according to the report.
Through advanced tax planning, the company has implemented the system of royalty payments to dodge tax payments, according to Uppdrag granskning's report, which uncovered the jumble of companies within Inter Ikea registered in the Netherlands, Belgium, Luxembourg, Switzerland, Curaçao, the Virgin Islands and Cyprus.
Despite the revelations, media advisor Paul Ronge doesn't think the information will negatively affect the image of Ikea and Kamprad.
"There are extremely few brands that are considered icons in Sweden, but Ingvar Kamprad is one of them. If someone decides to go after Kamprad, it must be with something that will cause people's jaws to drop," he said.
During his media training sessions, Ronge often compares Kamprad with beloved Swedish children's author Astrid Lindgren and actor and director Hasse Alfredson.
"Ingvar Kamprad has been perhaps the most skillful brand builder in Sweden as he has built up his brand over a long, long time. That makes for a very strong immune system during crises," he said.
"The key issue is whether people think this is so remarkable, shocking and new that they are prepared to reconsider the image of Kamprad that the majority of the Swedish people have held over the last 40 to 50 years," Ronge pointed out.
When a reporter from the programme tried to confront Kamprad with the information, he became angry and asked, "How can you ask such idiotic questions? Are you crazy?"
"It is deplorable that Ingvar Kamprad had an outburst like that. It is so unnecessary. He did not have to end up in such a situation. One should not react emotionally and in the presence of journalists to show yourself getting so pissed off," said Ronge.
Ikea Sweden plans to comment the revelations presented by Uppdrag granskning on Wednesday and early on Thursday morning, Ikea Sweden will host a chat on its website, where CEO Peter Agnefjäll will answer questions.