Former Skandia CEO facing criminal charges

Prosecutor Christer van der Kwast has decided to open legal proceedings against the former head of Skandia, Lars-Eric Petersson.

The charges against him are two counts of “breach of trust against a principal”.

According to van der Kwast, Lars-Eric Petersson raised the company’s bonus limits for the year 1998/99 without the approval of the board. That led to at least 185 million kronor too much being paid out to those participating in the company’s Wealthbuilder programme.

In addition, he is accused of taking 37 million kronor more than the board had approved for his pension.

The maximum penalty for such a breach of trust is six years’ imprisonment.

Petersson’s lawyer, Torgny Wetterberg said he is surprised that van der Kwast has chosen to press charges.

“I’m incredulous at his decision. He is taking upon himself a great responsibility,” said Wetterberg to TT.

“In my view he should have written to us about this.”

Wetterberg has spoken to Lars-Eric Petersson about the prosecutor’s decision but declined to say how his client had reacted.

“He’s innocent, what can he say? There’s not really much to comment on.”

Torgny Wetterberg said that he has had very little information about the charges.

“They haven’t sent any papers, I don’t know anything.”

Whether or not other Skandia bosses, notably Ola Ramstedt and Ulf Spång, will also face charges is open to speculation. Van der Kwast is not expected to make a decision on their cases for another month.

Skandia’s chairman, Bernt Magnusson, told TT that he had no comment to make, before promptly hanging up.

The Swedish Shareholders’ Association welcomed the prosecutor’s decision.

“The prosecution is necessary for the ongoing repair work to bring back confidence in the stock market,” said Lars Milberg, senior lawyer at the Swedish Shareholders’ Association.

“You have to show that there is a system of sanctions which deals with transgressions. The next question is what the courts will make of it, but so far the system has been shown to work.”

Perhaps even Lars-Eric Petersson will welcome a court case, noted Milberg.

“It’s good that the prosecutor has now concluded his preliminary investigation and has come to a decision,” wrote Skandia in a statement.

“Skandia has, as previously communicated, begun an arbitration process against Lars-Eric Petersson. Skandia’s compensation demand under civil law agrees largely with that put forward by the prosecutor in the criminal charges.”

A judgement in the compensation process is expected in the first half of 2006, said the company.

TT/The Local

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