More stores stung after cash firm bankruptcy

The effects of cash transport firm Panaxia’s bankruptcy have spread to convenient store chains Pressbyrån and Seven Eleven, according to a report by Swedish business newspaper Dagens Industri (DI).

• Millions 'missing' in wake of cash firm bankruptcy (18 Sep 12)

The owner of the two franchise chains, Norwegian group Reitan, say that their retailers may have lost millions in the scandal, which has rocked Sweden since early September.

The group told DI that they don’t know at present just how much money has been lost, but that they estimate some 85 million kronor ($13 million) of Reitan’s money has gone missing.

The company is now planning to offer their affected franchise owners financial support to get through.

“The missing funds are the retailer’s money and their own risk as they run their own businesses. But it is important for Reitan to be a good partner and to show that we have a strong franchise system. We have therefore told our retailers that we will provide them with financial support,” said Magnus Reitan, head of Reitan Convenience A/S to DI.

According to Magnus Reitan the company plans to seek the missing money from Panaxia bankruptcy administrators.

Since the cash transport company filed for bankruptcy on September 5th, reports of missing money have come in steadily.

The company had struggled to keep afloat after two top managers were implicated in a fraud investigation and the company had made a loss of quarter of a billion kronor.

Two days after the bankruptcy, Panaxia’s board contacted the Economic Crime Authority (Ekobrottsmyndigheten), saying that large sums of money seemed to have disappeared from a company account.

On Thursday, Economic Crime Authority confirmed that formal charges of aggravated accounting fraud would be filed later in the autumn against two former Panaxia managers.

The two were arrested an ordered held in remand in April. In June, the Swedish debt enforcement agency seized around 35 million kronor in assets, but the two suspects were later released, although the suspicions remained.

Although unable to comment on any individual case, Panaxia CEO Monica Hallin told Arbetarbladet that the recent disappearance of money would be added to the on-going fraud investigation against the two previous employees.

TT/The Local/rm
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