Annex to SVCA’s board decision 20170203
SVCA’s Board of Directors issues a stern reminder to IK following the Supervisory Board’s review of refugee accommodations
SVCA’s Supervisory Board has submitted its decision concerning the supervisory matter related to private-equity owned refugee accommodations.
The companies under review were:
- IK Investment Partners (IK), which at the time of the review was the majority owner of Attendo. Referred to as company A in the decision.
- Triton Partners, which along with Kohlberg Kravis Roberts & Co. (KKR) is the majority owner of Ambea, which in turn owns Vardaga and Nytida. Triton is referred to as company B in the decision and KKR is referred to as company D.
- Procuritas, which is a majority owner of Olivia. Referred to as company C in the decision.
SVCA’s Board of Directors notes that the Supervisory Board has concluded that:
- Compensation rates did not constitute a basis for any complaint from the Supervisory Board, since the market mechanisms normally at work in the public procurement of services from private service providers were set aside during the autumn of 2015 as related to refugee accommodations. The compensation rates that were paid were essentially unilaterally determined by public representatives.
- Shortcomings that were cited by the IVO have been addressed and have not caused any further action by the authorities.
- IK have looked to defer matters concerning Code of Conduct requirements to the portfolio companies, which is not consistent with the responsibilities that the Code imposes on the private equity firms as owners of the portfolio companies.
The four companies under review have displayed limited interest in co-operating with the supervisory matter, which may have delayed the review process.
Due to the aforementioned, SVCA’s Board of Directors has decided to:
- Publish the names of the companies that were reviewed.
- Not publish the supporting documentation, which contains information that is confidential to companies that were reviewed. For future reviews, it is crucial that the private equity firms be as transparent as possible with the supervisory board, with the knowledge that the information that is required to make an informed decision and increase the understanding of a particular situation will not be shared.
- Pursuant to section 4 of the Articles of Association, the Board of Directors has the ability to issue a stern reminder (or other sanction) to a member that is criticised by the Supervisory Board. Pursuant to section 4 of the Articles of Association and based on the Supervisory Board’s conclusion that IK looked to defer matters concerning Code of Conduct requirements to the portfolio companies, the Board of Directors has decided to issue a stern reminder to IK due to shortcomings in complying with section 4 of the Code. It is particularly important to maintain such responsibility when – as in the matter at hand – it concerns investments in sectors of society where operations are conducted for the rights of individual citizens, pursuant to section 7 of the Code.
- In other respects, not issue any stern reminders to the companies that were reviewed, as related to co-operation with the Supervisory Board during review matters, since the Supervisory Board’s criticisms in this area are too general.
The Board of Directors would like to reiterate that the Code of Conduct applies to all private equity firms that invest in Sweden. The Supervisory Board is tasked with reviewing all companies. The Board of Directors may subsequently issue stern reminders and warnings to all companies regardless of whether they are members or not.
SVCA: Elisabeth Thand Ringqvist, Chair, +46 8-678 30 90
SVCA’s Supervisory Board: Peter Nilsson, Chief Secretary, +46 70 645 74 52