Venture capital organisations operating in Sweden requested to be removed from the hate list by becoming more transparent in their operations

Tuesday, 17 July 2012
Swedish venture capital organisations want to be accepted by the Swedish population as a way of financing and growing businesses. To attain that they have been requested to become more open in their dealing so that they will not be seen as sharks ready to make money and avoid taxes, by all means, but as financial systems that can provide funding to organisations desperately in need for money.
 
Since the case with the company, Carema,  last fall, the venture capital industry has been subjected to harsh criticism in the Swedish media. Swedish Venture Capital Association is now calling its members for more openness in order to qualify the debate.

For instance, venture capitalists are accused of lining their pockets from running welfare organisations such as hospitals, schools,  Care homes and the likes,  and in return pay little or no taxes. With the current Conservative led government which is so blind to any business misgivings, venture capital organisations have prised open loop holes in the law some of which has even  made them received subventions from the government and then manage their taxes and interest payment efficiently such that all money they make is ferried to tax havens.

If one asks around town in the various business districts in Sweden, it seems that most people associate private equity companies with something negative.

Last fall, the private equity-owned company, Carema Care was accused of patient abuse whereby much was done by the company's management to spend as little as possible on care for patients in their care homes. This happened despite the tax system paying them huge amount of money to manage old people.

Then it turned out that the venture capital firms also had some of the most advance approaches in tax planning and management as well as a models whereby they will buy a strategic company or invest in other companies that are then sole often for a very huge profit.

In the past year, venture capital companies and their operations structure and attitudes have figured in the media such as in the defence of their different tax schemes.

This had detracted from the past, though, where venture capital firms, were never exposed to the outside world. There was a big dichotomy between them and the media, unions and politicians. Venture capital Companies that own Carema for example did not even have a public website before the scandal, and still, none of the major Swedish such companies has a web site in Swedish.

Now venture capital firms have become more open aimed at improving their bad reputation. Marie Reinius, CEO of Swedish Venture Capital Association told radio Sweden that persons in private equity firms need to prove themselves more so that they can be seen as "flesh and blood," who works in private equity firms.

Swedish Venture Capital Association has in the past year started great focus on providing information about the venture capital industry, most recently with a record investment in the political retreat in Almedalen. In the autumn, they will release a book on private equity-owned companies  and how they have performed.

Nevertheless, Per Strömberg, Professor of venture capital studies at Stockholm School of Economics, says that the industry brings in large amounts of foreign capital and create more jobs in Sweden. Adding that it is important to not only show the good sides. He believe that to be credible in the long term, they have to disclose more information both about things that went well and things that went bad, and feel free to give it out to the scientific community in order to get unbiased reports.
By Scancomark.se Team