EX-SKANDIA CHAIRMAN WILL REPAY FEES, COMPANY REVEALS IFRS HIT

Lars Ramqvist, former chairman of Swedish assurer Skandia, is to repay all the fees he received as chairman of the company, equal to more than SKr2.2m. He accepted “moral responsibility” for the alleged actions of senior executives whose salaries were dramatically increased as a result of the removal of a bonus cap on the 2000 Wealthbuilder programme. Skandia vice-chairman Björn Björnsson said that a legal investigation had shown that there were conditions “to demand liability for damages from the former chairman”. However, he felt that a long legal battle would not benefit Skandia and therefore the recompense agreement was “reasonable given the situation at hand”. Mr Ramqvist said that he and other directors “trusted the information provided by the former executive management” and could not therefore be blamed. But he accepted moral responsibility and agreed to the settlement “in the best interest of the company”. The company said that arbitration proceedings were continuing with former CEO Lars-Eric Petersson, while no action would be taken against other directors because “the prospects for success in such processes are very small”. Meanwhile, Skandia has said that the total effect on shareholders’ equity of the transition to International Financial Reporting Standards (IFRS) would be a 17% reduction in shareholders’ equity to SKr12.7bn. H1 2004 earnings will be impacted in retrospect by SKr170m after tax. Skandia noted that the date for recognising earnings was pushed back over time, but that it had no impact on cash flow.