Swedish National Debt Office seeks court declaration that Carnegie was taken over properly

Press release 29 July 2009

The Swedish National Debt Office today submits an application requesting Stockholm City Court to declare that the takeover of Carnegie Investment Bank (CIB) and Max Matthiessen Holding (MM) was conducted properly.

D. Carnegie & Co, the former owner of the companies, is questioning the takeover and at the same time wants to adjust the valuation. The valuation is founded on the Debt Office having acted correctly. The Debt Office consequently wants the City Court to confirm that the Debt Office sold CIB and MM in its capacity as owner and not as a pledgee. This issue is decisive for calculating any compensation due to the former owner.
 
The Debt Office was entitled under the contract with D. Carnegie & Co to take over the companies and then sell them as owner. The value of the companies at the time of the takeover is consequently crucial. If their value exceeded the support loan to CIB the surplus would pass to the former owner. The valuation, conducted by independent valuers, was lower than the amount of the loan and consequently no surplus has been paid out.
 
If the Debt Office had instead sold the companies as a pledgee - which the former owner has claimed would have been the correct way - there is no need for a valuation. Instead, any surplus from the actual proceeds of sale should be repaid to the former owner. The sale did not yield any surplus, though there may be such a surplus in the future owing to certain profit-sharing arrangements.
 
The former owner has applied for the valuation to be reviewed by the Examination Board, asserting that the valuation to be fixed for CIB should be several billion Swedish kronor more than both the sales price and the valuation that the independent valuers arrived at. One prerequisite for a review by the Examination Board is that the Debt Office sold the companies as owner. However, the former owner has left it open, if it fails before the Examination Board,  to subsequently go to the City Court to test whether the takeover was conducted properly. This approach is not acceptable.
 
"These questions must be considered in the proper order," says Bo Lundgren, Director General of the Debt Office. "There is no need for a valuation if the Debt Office sold the companies as a pledgee. If that were the case, the proceedings at the Examination Board would serve no purpose. The City Court should therefore declare that we sold the companies in the correct way."
 
The Debt Office will request that the dispute at the Examination Board be suspended pending the outcome at the City Court.
 
The Debt Office took over CIB and MM in November 2008, under the Support Act (Government Support to Credit Institutions Act 2008:814), to protect the stability of the financial system.
 
For further information, please contact:  
Bo Lundgren, Director General, +46 8 613 46 51