Cherry AB Seeks to Dissolve the Bitter Taste of CEO’s ArrestPublished May 29, 2018 by Lee R
The sacking was inevitable; the task for Cherry now is to promptly pick up the pieces.
Swedish gambling operator Cherry AB made official what became inevitable after CEO Anders Holmgren was arrested on insider trading charges.
Cause and Effect
The other shoe dropped Friday with Cherry Group’s announcement that the Board of Director’s had “resolved to terminate the employment of Anders Holmgren as CEO and President of Cherry,” with Holmgren’s departure “effective immediately.”
The situation was not pretty: Holmgren was arrested out of Cherry’s headquarters in Stockholm Swedish Economic Crime Authority EBM on formal charges of “severe” grade illegal insider trading.
Holmgren was subsequently denied bail at hearing in the Stockholm District Court, and faces six months to six years behind bars, a turn that already leaves his organization with a PR black eye.
The allegations apparently arise from Holmgren’s purchase of SEK12m (US$1.4m) in Cherry shares during a November 2017 profit warning phase, coupled with an April forecast by Cherry that Q1 results looked to be “better than anticipated” that saw Cherry shares subsequently rising 12.3%.
Damage control at Cherry comes in the form of an equitable send off, taking the position of reserving judgment.
Cherry chairman Morten Klein explained that Holmgren was being relieved from all capacities and holdings because the arrest rendered him “unable to perform his duties,” while maintaining that Holmgren had “made valuable contributions” to Cherry since his February 2017 appointment to the company’s top executive spot.
..And Begins Recovery
Former Cherry CEO and current internal audit committee chairman Gunnar Lind was named acting CEO to fill the void, with a permanent replacement being sought.
With gaming making such marvelous in-roads worldwide in terms of expanding regulation models and increasing acceptance by worldwide jurisdictions, it is unfortunate that a bad actor would seek to manipulate the system. The positives in gaming such as innovative self-protection measures and the integration of gaming communities across borders should stand as reminders of how far off the industry agenda Holmgren strayed.