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IRAQ

Scania CEO reports prosecutor over ‘oil-for-food’ bribery claims

Scania CEO Leif Östling has reported Sweden's top anti-corruption prosecutor for violating confidentiality rules in connection with his investigation into the Swedish truckmaker's alleged skirting of UN sanctions in Iraq.

Scania CEO reports prosecutor over 'oil-for-food' bribery claims

In late 2010 and early 2011, Östling’s name was repeatedly mentioned by prosecutor Nils-Eric Schultz, who has been investigating Scania for suspicions that the company paid millions of kronor in bribes to the former Iraqi regime of Saddam Hussein.

The alleged payments constitute a violation of UN sanctions and are said to have occurred in the early 2000s within the framework of the United Nation’s oil-for-food programme.

Speaking with Sveriges Television (SVT) in November, Schultz said that Östling is among the Scania bosses possibly facing indictment in the case as he held “the highest responsibility for these deals.”

The statements occurred before Östling had been interviewed in the probe and before he had been formally notified of the suspicions against him.

Östling has continually denied any wrongdoing, and earlier in June Schultz concluded that the Scania CEO would not end up being charged in connection with the case, although three lower-level managers would be indicted.

According to Östling’s complaint against Schultz, which was filed with Sweden’s Chancellor of Justice (Justitiekanslern), the news that he was suspected in the investigation received a great deal of attention in the media abroad and as a result damaged his reputation.

“The negative exposure and publicity which Schultz’s actions in the media has been going on continually and without any real possibility for Leif Östling to refute or otherwise defend himself against the allegations,” reads the complaint filed by Östling.

He claims that Schultz’s actions amounted to a violation of rules prohibiting the disclosure of confidential information related to a criminal probe.

In addition, the complaint alleges that Scania’s reputation was also damaged because Schultz gave detailed information about the bribery probe to the US Department of Justice.

“Schultz’s handling of the ongoing criminal investigation must been seen as reprehensible for several reasons,” Östling argued.

“Against the background of what has been described in this complaint, Scania and Leif Östling move to have the Chancellor investigate Nils-Erik Schultz actions described above and consider appropriate measures based on what has happened.”

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VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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