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AP2 investment chief resigns in tax probe

SWEDEN – Petter Odhnoff, chief investment officer of the SEK190.6bn (€20.5bn) Second Swedish National Pension Fund or AP2 has quit amidst allegations of tax irregularities following an audit conducted by the Swedish tax authorities.

The audit revealed Odhnoff “has been engaged in a number of transactions connected with an account in a foreign bank, as well as certain shareholdings”, according to an AP2 statement.

These transactions have not previously been declared for tax purposes. Nor have these transactions been reported in compliance with the fund’s guidelines on share transactions, said AP2.

In the past, Odhnoff had mentioned to IPE the salary and bonus structure at the AP funds. AP2 also spearheaded opposition to Old Mutual’s bid for Skandia. The fund returned 18.7% on its investments last year.

Odhnoff, 49, handed in his resignation following discussions with AP2’s new chief executive Eva Halvarsson and the board of directors.

Halvarsson – appointed in November 2005 as successor to Lars Idermark, who resigned in July 2005 - told IPE that Odhnoff will leave tomorrow but still be at her disposal for a month.

Responding to whether Odhnoff’s resignation was a personal blow, she said: “Of course it is.”

Halvarsson declined to comment on what the precise allegations were. However, Odhnoff’s resignation followed a mutual decision.

“It is disappointing, especially as Petter has been with us from the very start and, with his excellent input, has contributed to building the fund from the ground up.

“Nevertheless, I and the fund’s board of directors feel that Petter Odhnoff, in the light of what has happened, must resign his post. It is first and foremost a matter of trust. We have a comprehensive set of regulations, but this will naturally require that I, as new CEO of the fund, shall have to review our report routines and regulations,” she added.

Odhnoff could not immediately be reached for additional comment.

In a statement, he said: “I understand that confidence in me will have been undermined by my actions, especially in view of my responsible position as a senior manager in charge of other personnel.

“As a result, and in consultation with the CEO and the Board of Directors, I have designed to resign my post.”

AP2 asset allocation chief Tomas Franzén and equities head Poul Winslöw will take over Odhnoff’s responsibilities within the fund's executive management. Winslöw has also been appointed acting head of day-to-day portfolio management.

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