Sweden's Alecta faces regulator's call for police probe into Heimstaden investment

Sweden's financial regulator has requested that the police investigate potential corruption related to pension fund Alecta's investment in the property group Heimstaden Bostad, as disclosed by Alecta. The Swedish Financial Supervisory Authority (FSA) has been scrutinizing Alecta's acquisition of a 38% stake in Heimstaden Bostad for some time, launching an investigation in September to assess whether the pension fund provider adhered to regulatory requirements when committing 50 billion Swedish crowns ($4.74 billion) to the property company.

The FSA's move suggests escalating concerns over potential irregularities in Alecta's investment activities, signaling a broader effort to ensure compliance with financial regulations and standards within Sweden's pension fund sector.

"We note that the Financial Supervisory Authority has reported one or more persons to the police. We have not received the police report and are now awaiting the process," Alecta said.

The FSA confirmed it had contacted investigators. "We have been in contact with the prosecutor and handed in a complaint," said an FSA spokesperson, who declined to give further information.

Alecta said the external law firm Hammarskiold had made the assessment that there had been deviations from internal rules and that there were indications of violations of the law.

Sweden's anti-corruption unit at the public prosecutor's office confirmed it had received a report from the FSA, known in Sweden as FI.

"We can confirm that we have received a report from FI regarding suspected crimes in connection with Alecta. We cannot give more information at this stage," it said in an email to Reuters.

Heimstaden Bostad's parent company Heimstaden said the matter did not directly affect either group.

"We are taking the situation seriously and will assist relevant authorities upon their request," Heimstaden said.

Heimstaden Bostad has been under pressure in recent months as it struggles with large debts, rising interest rates and a wilting wider economy. Heimstaden has said it plans to divest parts of its housing portfolio to cut its debt.

Danske Bank credit analyst Louis Landeman said its base case was still that Heimstaden's owners would reach an agreement to support the company with additional capital.

"But of course, if some findings come out during this investigation that would indicate any type of wrongdoings by Alecta or anyone else then that would be something that could complicate and delay this process," Landeman said.

Source: Reuters