According to Åkesson, Isovaara's "credibility is minimal at the moment", adding that the MP has "personal problems".
"It's very hard to have confidence in anything he says," Åkesson told reporters.
“We had no reason to question him initially. We reacted to the information we had, now we have other information.”
Isovaara reportedly oinked like a pig and spat at a security guard in the early hours of Wednesday morning after he had reported a robbery.
He called the Expressen newspaper himself and urged them to publish the story, however the paper later published information that suggested the robbery never took place.
Isovaara had left his belongings behind in a Stockholm restaurant.
Police on the scene reported Isovaara for racial abuse following his attack on the guards.
The Sweden Democrats withdrew their earlier statement claiming Isovaara had been robbed by two "unknown, immigrant-background men".
Isovaara will be replaced by 24-year-old Markus Wiechel, the district chair for the Sweden Democrats in Östergötland County, who has previously been convicted of slander.
Despite the conviction, Åkesson said that Wiechel could still represent the party.
“If you look at what he was convicted for it’s about things that were written on his blog. We don’t consider it to be so serious that he can’t represent the party,” Åkesson told reporters.
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The party will also help Isovaara fight his personal issues.
"There are personal problems connected to these incidents, so our party will also offer him help,” Åkesson said.