New owner for Swedish HQ Bank, probe launched (Roundup)

Sep 3, 2010, 14:28 GMT

Stockholm - Swedish private investment bank HQ Bank on Friday announced it has a new owner, five days after its involuntary liquidation began.

Meanwhile the Swedish Economic Crime Authority on Friday said it would launch a probe into HQ Bank's prior activities and review if there had been faulty accountancy or possible deception in its operations.

The agency cited the decision over the weekend by the Swedish Financial Supervisory Authority (FI) to revoke the bank's licence due to severe undercapitalization and breach of banking rules.

'There is reason to believe that HQ Bank has published incorrect information regarding the value of its trading portfolio,' the Economic Crime Authority said, adding that the bank's annual and quarterly reports may have given 'an incorrect picture of the bank.'

Prosecutor Berndt Berger declined to comment if any individuals were already under suspicion.

In a stroke of irony, the new owner is the revamped Carnegie Investment Bank, which was taken over by the Swedish state in November 2008 and later sold to two investment groups.

Carnegie was to pay 268 million kronor (37 million dollars) for the HQ Bank shares.

Under the agreement, Carnegie was to guarantee all HQ Bank's client obligations, and has the option to acquire HQ Fonder Sverige AB, which manages equity funds.

FI has approved Carnegie's acquisition.

HQ Bank has been closed since Monday and its customers have not been able to move their funds to other banks or institutes.

The bank's share prices fell by 80 per cent on Tuesday. On Friday, they plunged further after trading resumed.