Northvolt
A collapse that must have consequences
Andreas Cervenka
Reporter and economic commentator
This is a commentary text. Analysis and positions are those of the writer.
Published 15.26
Not only has Northvolt's CEO Peter Carlsson enriched himself from the company, but also large parts of the management.
The Swedish pension companies that lost billions in the accident have several questions to answer.
"The managers cashed out and Northvolt crashed". That is the headline in the editorial section of Svenska Dagbladet.
The article is about several people in Northvolt's management selling shares for enormous amounts before the crash. It has long been known that CEO Peter Carlsson received around 200 million before the company collapsed.
According to documents obtained by SvD, co-founder Paolo Cerutti made profits in his private company of one hundred million kronor and gave himself a dividend of 71 million.
Another key person, Emad Zand, has made profits of 79 million kronor in his company, and several others in management have reported capital income in the double-digit millions in recent years, according to the newspaper.
Several have already left the company.
Northvolt's spokespersons admit that there have been "a lot of sales" in management but tell SvD that "some of it was about freeing up money for new investments, and that it is completely normal for senior executives to sell shares."
Excuse me, but who do they think they are fooling?
No, that is absolutely not normal. That is actually how abnormal it can be.
It is true that managers are given the opportunity to invest in their company and then reap the profits. But only in companies that have proven that the business model works and where other investors also have the opportunity to sell, for example through a stock exchange listing.
It is difficult to think of a company in history that has been further from proving itself than Northvolt. The company has burned billions every month and has had chronic production problems since its inception.
During this time, large parts of the management have become rich.
They leave behind a stinking pile of problems: a company that is bleeding hundreds of millions a week, with 64 billion in debt and a subsidiary that has been declared bankrupt and where employees and small and medium-sized entrepreneurs have been thrown under the bus.
Northvolt has demonstrated a business ethic that does not belong in Swedish business.
The information about managers sneaking out the back door with millions in their pockets makes matters even worse.
What did the managers know about Northvolt's problems when they sold? And who gave them the go-ahead to sell?
That key people in a newly started company should not be able to take home profits until there is some type of change of ownership, such as a stock exchange listing or sale, is an absolute basic rule in the venture capital industry.
Several Swedish pension managers are owners of Northvolt. In total, 1-4 Ap-fonden, AMF Pension and Folksam/KPA have invested nine billion. That money is gone.
Other owners have already written down the value to zero and the Financial Times wrote on Friday that it looks bleak to find new investors or buyers for Northvolt.
This is easy to understand since the company has so far spent well over 100 billion and is still unable to manufacture more than microvolumes of batteries.
It could still end in bankruptcy.
If the managers sold without the knowledge of other investors, it is a scandal and should cause the pension companies to contact lawyers.
This also applies to those who bought shares from the directors.
If the AMF, the AP funds and Folksam gave the green light to the share sales, it is almost an even greater scandal because they have then seriously failed in their judgment as investors and thus in their responsibility towards their clients, Sweden's future pensioners.
The pension companies should answer for what is happening.
So much has gone so badly at Northvolt, where the forecasts given in connection with capital raising have proven to be thinner than the air at the top of Mount Everest, that a thorough investigation of what has happened is warranted. The Swedish institutions should take the initiative.
After all, it is not small amounts that have gone up in smoke.
In the debate about Northvolt, it has been highlighted several times that all entrepreneurship is associated with risks and that there is no shame if things go wrong.
That is absolutely true.
But what has happened in Northvolt is something completely different.
There, the shame seems to have gone on dry land.
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