Public Service Sell-offs Illegal

Sweden’s Supreme Administrative Court has upheld a lower court decision that the city of Stockholm broke the law when it sold off home care services to two former employees.

The two were allowed to buy the service in the Vantör area for around 10,000 dollars, the value of stocks in inventory. After the sale, the privatized company’s profit before taxes in 2008 and 2009 came to around one million dollars.

An economist commissioned by the newspaper “Dagens Nyheter” has estimated that the market value of the service would have been more than three million dollars.

The ruling by what is Sweden’s supreme court for administrative cases has political repercussions. Sell-offs of public services began after the center-right parties took power nationally and in Stockholm in 2006.

The sales have come under strong criticism for selling public property for far less than market values. In another prominent case, a district court ruled that the municipality of Täby’s sale of the Tibble High School was illegal because the price had been set too low.