Trial Against Former Skandia CEO Begins
The trial against Skandia Group’s former CEO Lars-Eric Petersson began in Stockholm on Friday.
Lars-Eric Petersson, who was fired in April 2003, is charged with fraud for allegedly handing out large bonuses and pensions to himself and other executives without board approval.
Petersson told reporters as he arrived at the Stockholm District Court that ”It feels good that this trial is finally starting. ” He added that ”I have great faith that this trial will answer many questions that there are now only speculations about.”
Petersson is accused of giving US$25 million in unauthorized employee bonuses between 2000 and 2001, according to court documents filed Tuesday.
Prosecutor Christer van der Kwast also said Petersson added a total of US$5 million to his own retirement plan without informing the board of directors.
Van der Kwast told the court that Skandia suffered ”serious damage because Petersson severely abused his position.”
Petersson’s trial is expected to last at least 20 days, and a verdict should be announced by April. If convicted, Petersson could face up to six years in prison.
Skandia Image Still Tainted
The 150-year-old insurance company came under heavy criticism in 2003 for the large bonuses it paid to top executives, for an alleged improper relationship with life-insurance arm Skandia Liv and for having awarded luxury apartments to a small group of executives who have since departed.
Ola Ramstedt, a former deputy chief executive at Skandia, has also been charged with fraud and bribery for allegedly making the company pay more than US$2.2 million for renovating apartments belonging to fellow executives or their relatives.
Ramstedt is accused of approving the renovations in 2001, but then filing a false invoice to make it look like the money had been used to renovate Skandia’s main office in downtown Stockholm.
Many Swedes were outraged by the perceived greed shown by Skandia executives, and the company is still working to revive its image.
However, Skandia could not fight off a hostile takeover bid launched last year by South African financial services company Old Mutual PLC, which now owns nearly 90 percent of the company.