Scandal and Sweden are not two words you would usually put together but a string of scandals involving Swedish companies has threatened to taint Sweden’s spotless reputation.
Trouble in Sweden?
Sweden does not usually have a reputation for scandal or corruption. In the Transparency Internationals Corruption perceptions index, Sweden currently ranks third but all that may change as a string of corporate misconducts has hit many Swedish companies.
These transgressions may threaten the image Sweden has of being a moral and honorable country.
The following companies have been at the center of some of the scandals –
- Swedbank – Several executives were accused of various inappropriate transactions
- Industrivarden and SCA – along with several other companies, investigations have been conducted regarding unacceptable functioning of different company perks
- TeliaSonera – accused of bribery and failure to perform adequate background checks
- Nordea and Handelsbanken – accused of money laundering
So, why was Sweden suddenly been hit by recent scandals? The scandals remain open to speculation. Unfortunately, corruption is everywhere, and no country is immune.
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Swedbank has managed to pull itself up from the financial crisis and showed strong signs of growth and economic recovery. To achieve this, they focused their efforts on cost cutting and shareholder payouts.
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In the background, however, a string of private transactions undertaken by senior executives have damaged Swedbank image. The Sweden’s financial regulators investigated the operations, and several top officials have been forced out, including the former chairperson Michael Wolf.
Investigations are on over the allegations of private property deals and investments to banned companies. These claims have been denied by all parties involved.
Industrivarden and SCA
Industrivarden, a Swedish holding company, was at the center of a large investigation involving various companies. Industrivarden is the controlling shareholder of several companies including Handelsbanken, Volvo, and Ericcson.
Investigations started when a Swedish newspaper published articles which questioned the use of SCAs, a global hygiene, and paper company, corporate jet. An internal investigation declared that there were no misses in the policies. However, the companies public image is damaged due to details of privates jets being used by various people (including family) for personal reasons.
The company has since amended their policy so that family members are no longer allowed use of the corporate jets.
Several board members for some of Sweden’s largest companies have resigned or fired as a result of investigations.
TeliaSonera, a telecommunications company, has been forced to exit Central Asia due to investigations of corruption surrounding their business in Uzbekistan. The US Department of Justice and the Swedish Prosecutors are investigating TeliaSonera.
TeliaSonera was found to assess its local partner inadequately and who its owners were. There had been claims that company in question were close associates of Gulnara Karimova, the Uzbek president’s daughter.
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There were further claims that bribes of $320 million had been paid by TeliaSonera to the company in question since 2007. These allegations, however, have not be proved or disproved.
The Swedish government has a 37% stake in TeliaSonera and requested full clarity on the allegations.
Nordea and Handelsbanken
Nordea and Handelsbanken were both fined for their lax attitudes towards anti-money laundering controls. Both Nordea and Handelsbanken were asked to pay SKr50m and SKr35m as a fine respectively.
Sweden’s Financial Supervisory Authority has publically criticized both the banks for allowing the risk of money laundering to remain high.
Despite both the banks being unharmed by the financial crisis or the recent scandal involving several banks in regards to fixed interest rates or foreign exchange levels, this has damaged the reputation of both banks.
Corruption in Sweden
The Swedish National Council for Crime Prevention defines corruption as an abuse of power.
The level of corruption in Sweden is still quite minimum, especially in comparison to other nations. This credit for little crime is a result of the legal and institutional framework which is in place.
Small corruption levels do not mean any offense, so there are bound to be some transgressions along the way. So why does crime happen?
The key reasons for corruption are greed, lack of ethics, the decline is public service, being unable to resist/ fight against corruption, cultural environment, lack of transparency, inefficient regulations, slow justice processes, lack of morals, and downplaying corruption.
So, if you know what causes corruption than you can potentially put a stop to crime by improving law enforcement and legal framework, reforming financial management and auditing, promote transparency, empower citizens, and close loopholes.
However, nothing is ever that easy, and things will not change overnight. The steps mentioned above would usually take the time to implement, and that is only if the individual countries leaders agree to implement preventative measures.
It’s impossible to say for certain whether the new corporate offenses will damage Sweden’s reputation worldwide. Sweden can maintain its public image thanks to the investigations of the crimes and the strict punishment to those involved.
As it currently stands, Sweden still has a positive public image.