September 5, 2014 / 4:10 PM / in 3 years

UPDATE 2-Sweden's Eniro finds accounts inaccuracies, may call in police

(Adds comments from company, updates shares)

By Olof Swahnberg and Helena Soderpalm

STOCKHOLM, Sept 5 (Reuters) - Sweden’s Eniro said it may bring in police after it unearthed inaccuracies in its accounts which forced the directories firm to cut profit forecasts, wiping nearly a third off its market value on Friday.

It was the second time in two months Eniro had issued a profit warning and its shares fell 29.2 percent to 13.75 crowns, extending their market slide this year to more than 70 percent.

Eniro replaced its chief executive, Johan Lindgren, less than a month ago. It said then the board and Lindgren had “mutually agreed” he would leave.

The company said on Friday it had now cancelled an agreed severance package for Lindgren.

“We took the decision to dismiss Johan Lindgren,” Eniro Chairman Lars Johan Jarnheimer told reporters on Friday.

Reuters attempts to reach Lindgren for immediate comment, by phone and at his Stockholm address, were unsuccessful.

Jarnheimer said Eniro was waiting for a recommendation from external lawyers before deciding whether to call in the police.

Eniro said it now expected earnings before interest, taxes, depreciation and amortisation of 700 million Swedish crowns ($99 million) in 2014.

On July 16, Eniro lowered its profit forecast to 850 million euros from about 950 million after a second quarter of weak sales at its Swedish business, above all at its web search portal.

Eniro said the negative impact of the inaccuracies came to 58 million crowns on sales and earnings before interest, tax, depreciation and amortisation in 2013, while the impact in the first half of 2014 was 28 million.

Investigations into Eniro’s Swedish operations have been closed and Jarnheimer said he saw a limited risk of accounting inaccuracies from the company’s other Nordic operations.

Eniro’s biggest shareholder Danske Capital, which owned 11.4 percent of share capital at the end of August according to the company’s website, declined to comment on the case.


Sweden’s largest shareholders association, however, said Jarnheimer should be replaced as Eniro chairman and a new chairman should initiate an investigation by an independent law firm into any wrongdoing at Eniro.

“If the company has been badly governed, the vultures could soon be flocking to buy it,” spokesman Albin Rannar told daily Svenska Dagbladet.

Eniro’s board of directors have commissioned an investigation to validate the firm’s accounts. The probe is being conducted by Eniro’s auditor, PricewaterhouseCoopers, which also was auditor for the company in 2013.

A traditional Yellow Pages outfit with more than 100 years behind it, Eniro’s old business model was undermined by the Internet and devices such as smartphones. Revenues have fallen by about half since the 2008-2009 financial crisis.

Eniro told Reuters in March that sales should grow in 2015 after several years of falling revenues.

On Friday, Jarnheimer told Reuters he would not comment on future growth, but there had been no major changes for the company’s future business prospects.

Eniro’s woes come in a week that has seen other European firms adjust past earnings due to accounting errors.

Swiss computer accessories maker Logitech said this week it would make minor adjustments to earnings for 2011 and 2012 due to erroneously booking inventories.

PricewaterhouseCoopers audited Logitech’s earnings in the affected years.

German sportswear maker Puma said this week it had understated its 2012 pretax profit by at least 10 million euros ($13 million) because of accounting errors.

Deloitte & Touche was Puma’s auditor for its 2012 report. (1 US dollar = 7.0709 Swedish crown) (Additional reporting by Mia Shanley and Simon Johnston; editing by David Clarke)

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