Cherry AB axes CEO after insider-trading arrest

Cherry AB, a Sweden-based gaming company, has sacked its CEO Anders Holmgren, following his arrest by the Swedish authorities for “severe insider trading.” Holmgren was also the co-founder of Betsson.

Holmgren had bought shares of Cherry AB worth about US $1.37 million or €1.175 million a few weeks before the company published its unexpectedly positive 2018 first quarter results. The results were so good that the shares rose highly. His stock purchase led to serious allegations of insider trading, which eventually led to his arrest. He was heading Cherry’s operations at its new Malta facility when he was arrested.

Former Cherry CEO Gunnar Lind will return to that role on an interim basis while the company decides on its new permanent CEO. Lind is also the head of the company’s Audit Committee.

Four press updates released

Cherry AB has issued four daily statements regarding the Holmgren matter since Tuesday morning’s raid, strictly conforming to the requirements of the European Union’s Market Abuse Regulation code. Those four statements include Tuesday’s acknowledgment of the raid by Swedish Economic Crime Authority. According to that brief update, Sweden’s ECA had “performed a search at the head office of Cherry AB and in relation to this event, the company’s CEO, Anders Holmgren, was arrested.”

Wednesday’s and Thursday’s updates, in turn, offered the news that Holmgren had been detained, was denied bail, and was scheduled for an initial court hearing on Thursday, and then on Thursday, that the initial court hearing had occurred and Holmgren will indeed face trial. Holmgren could face a sentence of anywhere between six months to six years in prison if convicted, in addition to financial penalties.

Friday’s update brought the news that Holmgren was out as Cherry AB’s head, likely unsurprising given the earlier developments.

According to the latest statement:

The Board of Cherry AB (publ) – STO: CHER-B.ST, has resolved to terminate the employment of Anders Holmgren as CEO and President of Cherry. Effective immediately, he will leave the company and the Cherry Group. The process of finding his successor is initiated.

Morten Klein, chairman of the board of Cherry AB commented: “Anders Holmgren has made valuable contributions as CEO of Cherry, but he is unable to perform his duties while facing accusations of severe insider trading. The board of directors has today decided to terminate his employment as CEO. In connection therewith, Anders Holmgren will also leave his assignments as board member in Cherry’s subsidiaries. As previously announced, Gunnar Lind is acting CEO and will remain in this position to ascertain that the group develops according to plan until a permanent CEO is appointed.”

Sudden end to Holmgren’s run

Holmgren first emerged to prominent industry view as one of the three co-founders of the bookmaker Betsson, along with Henrik Bergquist and Fredrik Sidfalk. Betsson and Cherry AB (which was also formerly known as Cherryföretagen AB, have swapped business divisions on several occasions over the past 15 years, and though Betsson AB is separately-traded entity, the two remain closely tied.

Holmgren served as Betsson’s CEO from 2000 to 2011, moved to other roles as the companies shifted their combined focus, and then was named as Cherry’s CEO and President in January of 2017. Holmgren also played a prominent role in the company’s opening of its new Malta headquarters.

Cherry’s abrupt ending of the Holmgren era included a cooperation pledge with Swedish authorities, according to the initial statement that also named Lind as the returning CEO.

Source: flushdraw.net