KREUGER CASE

Hokitika Guardian, 22 February 1933, Page 2

KREUGER CASE

TREMENDOUS PERSONAL SPENDINGS. THE AUDITORS’ COMMENTS. STOCKHOLM, January 9. The disclosure that Ivar Kreuger, the Swedish “match king,” personally spent 432)000,000 Swedish crowns (about £24,000,000 at par), during the period of more than 14' years, covered by his frauds, is made in the final report oi Messrs Price, Waterhouse, and Company, the London auditors, on the affairs of the Kreuger and Toll Company.

The report, which is to be issued tomorrow, states that falsifications began in 1917, and covered a period exceeding 14 years, tl)uring which the balance-sheets showed income overstated by more than a. milliard crowns (about £55,500,000), represented by fictitious credits.

Fraudulent manipulations, the report adds, assumed the largest proportions in 1923-24, culminating in the fabrication of the Italian bonds.

Kreuger’s successful concealment of the frauds is abscribed to:

The unbounded confidence felt in the man himself. ,

General acceptance of his claim that secrecy ivas. essential to the success of his operations;

The autocratic poivers conferred on him; The loyalty or unquestioning obedience of Kreuger’s officials. “The history of this group of companies,” says the report, in conclusion, “emphasises aneiv the truth that enterprises, in which complete secrecy on (the part, of the chief executive officer as to the way in which important parts of the capital are to be employed is, or is alleged to be essential to success, are fundamentally unsnited to public investment, since such secrecy undermines all ordinary safeguards and affords to the dishonest executive unequalled' opportunities for the perpetration of frauds.” .