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.