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SKANDIA

Ex-Skandia boss spared 300 million bill

The former CEO of Swedish insurance company Skandia, Lars-Eric Petersson, has been told he does not have to pay damages to his old company. The company had demanded 300 million kronor from its former chief.

The decision was reached by a committee appointed by the parties in the case.

“This is a complete success. Skandia’s case has been dismissed,” said Petersson’s lawyer, Christer Brantheim.

“The committee ruled decisively that Lars-Eric Petersson has not done anything wrong,” he added.

Skandia took Petersson to court in 2004 for his handling of the very high bonuses paid out by Skandia around the turn of the millennium, and he was sentenced this spring to two years in jail. Petersson has lodged an appeal against the verdict.

In Friday’s decision the committee, composed of two judges and a lawyer, discussed whether he had caused financial damage to Skandia.

The committee was unanimous in its judgment, according to a statement from law firm Södermark. The committee’s findings were handed on Friday to the Svea Court of Appeal as evidence that the district court’s verdict and sentence should be overturned.

“I am happy and relieved that the truth has finally come out,” Petersson said in a written statement.

Skandia had sued Petersson for 300 million kronor. Skandia’s profits and share price shot up around the year 2000 and Petersson was praised by the company’s shareholders. But many executives in the company’s US and British subsidiaries demanded more money and were granted it.

Petersson himself was not paid out of the Weatherbuilder bonus programme, but he was convicted earlier this year of bypassing the company’s board and removing the programme’s ceiling. The move cost Skandia 156 million kronor, according to the verdict from Stockholm district court.

Skandia sued Petersson for 300 million kronor in 2004. In order to avoid long and time-consuming court cases the parties agreed that the case would be considered by a committee consisting of a Skandia-appointed lawyer, one appointed by Petersson and one further member. The committee’s negotiations have been held in secret and the result was not open to appeal.

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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