Dear Mr. Novella
Samhällsbyggnadsbolaget i Norden – Audit Risks
We refer to Viceroy Research’s Samhällsbyggnadsbolaget i Norden AB (SBB) report dated February 21, 2022, and subsequent communications. We are contacting your due to concerns about audit risks at SBB. They involve:
Auditor Risk: SBB shares its immediate audit partner with its largest shareholder, and CEO’s personal investment company for at least the past 3 years.
- We do not believe it is acceptable that the tender for one of Sweden’s largest Real Estate Investment Companies is optically tied to lucrative audit contracts of the CEO and majority shareholder’s private investment vehicles. These contracts have passed between audit partners simultaneously: Ingemar Rindstig and yourself.
Valuation Risk: SBB’s appointed valuer, Newsec, through appointed partner, Ulrika Lindmark, appear to hide longstanding personal connections and concurrent contracts for the Batljan family.
- Both SBB’s and Ilija Baltjan’s investment vehicle’s registered business addresses are the Newsec Property Asset Management Office.
- Public facebook pages show Ms. Lindmark appears to be a personal friend of the Batjan family. Ms. Lindmark also signs off SBB’s valuation, and Newsec is responsible for the valuations of Ilija Batljan’s investment vehicles and companies where Mr Baltjan’s wife serves as CEO.
Governance and internal control risk: SBB have provided strawman responses and relied on laughable technicalities to defer questions on nature of independence of its directors.
- We address SBB’s responses and highlight further independence and control risks to SBB’s audit.
- SBB & IB Invest appear to individually wholly own the property Vågskålen 24. This is concerning given Ingemar Rindstig was the auditor of both companies.
Systemic M&A round-tripping and revenue round-tripping are coordinated to effectively float SBB’s profits, balance sheet, and capital raises.
Audit weakness have allowed the issues above to occur without investors being informed and without comment or objection by yourselves. We hope that this letter will more clearly lay out the audit issues at SBB such that you can fulfil your responsibilities to stakeholders.
Viceroy Research Group