Swedish measurement technology firm Hexagon has defended the time it took to announce the arrest of its chief executive for alleged insider trading after it came to light he was under arrest during last week's earnings call with analysts.
Analysts in the dark over arrest
After being detained in Sweden on Oct. 26, Ola Rollen was allowed by the Swedish Economic Crime Authority to present Hexagon's third-quarter results in a conference call on Oct. 28, the agency told Reuters on Tuesday, adding two of its police officers were with Rollen during the call.
Analysts on the call were not told Rollen had been arrested or that police were in the room. Rollen canceled a planned telephone call with media, including Reuters, on the same day.
The company announced only on Monday, Oct. 31 that Norway's economic crime authority had accused its CEO of insider trading in connection with an investment in Norwegian company Next Biometrics ASA in October last year, a transaction which did not involve Hexagon.
Rollen, who is now being held in Oslo, has denied wrongdoing in a statement issued by his lawyers.
A Nordic arrest warrant was issued by Norway on Oct. 23, a copy of the warrant obtained by Reuters showed.
Hexagon, a company Rollen turned from a sprawling conglomerate into one of Sweden's most valuable companies, said it had learned of his arrest late on Wednesday, Oct. 26, the day he was detained in Stockholm.
"But at that point we only had very summary and conflicting information. During Thursday and Friday we learned that a detention hearing would take place on the Saturday in Oslo," Hexagon said in e-mailed comments.
"We then took the decision to delay the publication of this information until we had a more complete picture."
Hexagon shares fell 10 percent on Monday after the news of Rollen's detention was published. Its shares had fallen a further 1.9 percent by 1225 GMT on Tuesday.
'Business as usual'
Asa Vasshagen, who is responsible for corporate governance issues at the Swedish Shareholders' Association, called on Stockholm's stock exchange to look into the matter, saying it was odd Rollen was "running business as usual" while under detention.
"We think that when information is there you should pass it on to the stock market - we don't see any reason for it to be held back," she said.
"The most relevant way to act is to give true information to the market as soon as you can."
Rollen fielded questions from big U.S. investment banks and Nordic brokerages on the earnings call, with the subjects covered ranging from growth forecasts for different parts of Hexagon's business, as well as the impact of Britain's vote to leave the European Union and U.S. presidential elections.
"I thought Ola sounded a bit downbeat but I would never have guessed," said Daniel Djurberg, an analyst at Handelsbanken Capital Markets who participated in the call. "Generally, something like this should come out as soon as possible."
As of the end of September, Hexagon's top five shareholders included Swedish businessman Melker Schorling, top H&M investor Stefan Persson's Ramsbury Invest, SSB CI Omnibus, Swedbank Robur Fonder and JPM Chase.
Schorling, who is chairman of Hexagon, has said he has full confidence in Rollen.
Timing to be looked at
A district court in Norway has ordered Rollen be detained for a week and he has been transferred to the Norwegian capital.
Hexagon's decision to delay making the information public was possible under European Union regulations and the rules of the Stockholm stock market, said Joakim Strid, Head of European Surveillance at the Nasdaq exchange, which owns the stock market. However, he added the timing would be looked at.
"That is the company's decision. However, it is our responsibility to follow up how the company handles its provision of information," Strid told Reuters.
"On the basis of that we will now be asking the company questions about what deliberations they had ... We have a continuing dialog with the company and the company is aware that it will need to provide information about this."