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SKANDIA

Former Skandia chairman grilled in court

The start of the trial of the former managing director of Skandia, Lars-Eric Petersson, was delayed by 15 minutes on Tuesday because witness and former chairman Lars Ramqvist was stuck in traffic on his way from Södermanland.

Looking somewhat ruffled, he charged into the courtroom and was immediately bombarded with questions by prosecutor Christer van der Kwast.

Ramqvist stated categorically that he did not know that some time during 1999 or 2000 the board had decided to raise the ceiling on the company’s Wealthbuilder bonus scheme.

“The board took the decision in February 2000 to lengthen the duration of Wealthbuilder and the other bonus programmes until May with unchanged conditions, with a ceiling of 300 million kronor,” he said.

On many occasions on Tuesday morning Ramqvist found it difficult to remember certain incidents in 1999 and 2000. Nor did he remember many documents about the discussion surrounding Skandia’s bonus programme which van der Kwast referred to.

In May 2000 the Skandia board was informed that the payout for the three extended bonus programmes was preliminarily 800 million kronor. At the beginning of August the board decided to add a cost of 620 million kronor for the schemes to the half year result.

Prosecutor Christer van der Kwast referred to a series of documents showing that in autumn 2000 the management began discussing a new framework for bonus payouts.

“I’m very surprised that just a few days after we set the costs for the bonus programmes in the half year results the management began discussing new models for the programmes,” said Lars Ramqvist.

“It’s also hard to understand that we in the board did not get any information during the autumn from the management or from the auditors.”

Lars Ramqvist emphasised the fact that a board in a listed company is completely dependent upon getting correct information from the management and auditors.

“I think it seems as though Lars Ramqvist and the board were offside when it comes to Petersson and the auditors,” said Christer van der Kwast.

“I consider that we on the board were deceived,” said Ramqvist.

In May 2000 Lars-Eric Petersson, Ola Ramstedt and Ulf Spång wanted to renegotiate their bonuses under the Wealthbuilder scheme.

Petersson secured a package consisting of options, a pension and a bonus. The board approved the agreement with Petersson in August. It was a good deal, said Ramqvist, with the costs being borne by Skandia’s pension fund and not the company.

TAKEOVER

Scania review board dissects Volkswagen bid

The independent committee looking at Volkswagen's take-over bid of Swedish truck giant Scania began its work on Tuesday, stating promises that headquarters would remain in Sweden were paramount.

Scania review board dissects Volkswagen bid
IF Metall Union representative Johan Järvklo sits on the independent review board. File: TT

Åsa Thunman was appointed chairwoman of the committee, which has invited financial consultants from Deutsche Bank and Morgan Stanley as well as legal advisors from Swedish law firm Mannheimer Swartling to assist them in their appraisal.

Thunman said in a statement that the committee would look at whether the $9.2 billion bid was in the best interest of Scania shareholders.

The effect on Swedish industry would also be considered, underlined committee board member Peter Wallenberg Jr.

"It has noted that Volkswagen does not foresee any significant changes with regards to Scania and that Scania’s headquarters and its development centres will remain where they are today," Wallenberg Jr. said. "These matters are of course of importance to the company and for Sweden.”

At the plant in Södertälje, employees have been busy discussing the bid. Assembly line worker Ahmed told The Local that his colleagues did not fear that production would be relocated to Germany.

"They couldn't possibly move all these machines and equipment," Ahmed, which is not his real name, told The Local on Tuesday. "But everyone on the floor has been discussing the offer."

Volkswagen tabled their $9.2 billion bid to swallow up Scania last Friday. It already owns 89 percent of Scania's voting rights and 62.6 percent of the company, with VW eager to secure the nearly 40 percent they do not own. The takeover has encountered resistance from two of Scania's minority owners, however. Both insurance outfit Skandia and pension fund AP4 have expressed reservations about selling up to Volkswagen.

“Scania’s prerequisites to maintain its leading position are better as a listed company than as a subsidiary in a larger group. Skandia doesn't intend to accept the offer," Caroline af Ugglas, head of equities at Skandia, told Bloomberg over the weekend.

Scania, which was founded in 1891 and has operations in more than 100 countries, boasts 38,600 employees. Around 16,000 work with sales and servicescross the company's subsidiaries, and over 12,000 work in production units. The company has headquarters in the Swedish town of Södertälje, where almost 6,000 employees work. The headquarters also hosts the research and development operations, with 3,300 employees.

"Changing owners won't make any difference to us in the near future," assembly line worker Ahmed said. "But we do wonder if the rules will change later on." 

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