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SKANDIA

Former Skandia CEO jailed

Former Skandia managing director Lars-Eric Petersson has been sentenced to two years in jail for two years for breach of trust by Stockholm district court.

Petersson was found to have unlawfully removed the ceiling in the company’s Wealthbuilder bonus programme.

Prosecutors alleged that the actions in December 2000 cost Skandia 185 million kronor, but the district court found proof only that it had cost 156 million kronor. The court acquitted Petersson from the charge that he appropriated 37 million kronor through changing his pension agreement with Skandia.

The court also rejected prosecutors’ demands that Petersson should be banned from participating in business. It said that because the crime was directed only against Petersson’s employer there were no grounds for a ban.

The court was not unanimous in its ruling, with assistant judge Niklas Eideholm dissenting. He wanted to clear Petersson on all charges. He found that prosecutor Christer van der Kwast had not presented sufficient evidence on the charges relating to the bonus programme.

“For someone to be convicted of a crime like this, there must be intent,” he told news agency TT.

“In this case there needed to be comprehensive proof that Petersson really understood that the ceiling o Weatherbuilder was still in place when he signed Appendix 3, which removed the ceiling.”

Petersson had told the court that he thought the board had removed the ceiling in January 2000.

“The prosecutor has not succeeded in presenting sufficient evidence that this was the case. In criminal cases the prosecutor must prove his claims.”

The ruling is likely to be appealed, and Petersson remains at liberty pending further court action.

In the court of appeal three legally-trained judges and two politically appointed magistrates will investigate whether Petersson has committed a crime. The district court is composed of two legally-trained judges and three politically-appointed magistrates.

Skandia’s deputy chairman Björn Björnsson referred all questions to the prosecutor.

“Our lawyers will naturally study the ruling, the judgment and all the reasons cited.”

He said he did not think the judgment would have a direct impact on the arbitration hearing expected this fall, in which Skandia is suing Petersson for 300 million kronor. Neither side will be allowed to appeal the ruling in that case.

Skandia’s profits and share price soared around the turn of the millenium and managing director Lars-Eric Petersson was supported by the company’s shareholders.

But managers, primarily in the company’s American and British operations, demanded more money – and one way or another, they got it.

The prosecution was launched after the publication report on the fortunes of Skandia by lawyer Otto Rydbeck.

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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