Swedish Government: Saab's Books Were Cooked

Thor Johnsen
by Thor Johnsen

Looks like GM may have done some creative accounting after all – at least according to Swedish Government and their consulting firm KPMG. As we’ve reported the last couple of days, Saab’s rescue has been hanging by a thread due to questions around the company’s financial situation prior to the start of the financial crisis. Saab needs the EU to approve the Swedish Government’s guarantee of an EIB loan to Koenigsegg group if the deal is going to go through. If Saab, during the summer of 2008 – when the financial crisis started – were not in sound financial condition, the EU cannot, will not, approve Swedish government’s guarantees to the EIB loan, and the loan will not be granted. And reports from di.se yesterday almost laid that possibility to rest, with reports that GM had lost $ 5.100,- on each Saab-car sold during the last 8 years. Now, as commentator dlfcohn and others at ttac, as well as several commentators at di.se have pointed out, creative accounting can be useful in major corporates i.e to avoid taxes in tax-heavy countries. This, apparently (at least according to Swed.gov’t/KPMG) was the case with GM/Saab.



Consulting firm KPMG has been commisioned by the Swedish Government to go through Saab’s finances, and examine the cash-flow and sales. The consolidated report, from which the government has produced an 80-page document to the EU, concludes that Saab was not in any financial trouble during summer of 2008, due partly to GM having infused capital into the company. Saab themselves has apparantly also helped document that they were in fact in good financial health mid 2008.

Sources from within Saab have told automotorsport.se that GM has never been interested in reporting taxabale gains in Sweden. Revenues from US sales were never declared in Sweden, but rather went straight to GM. A number of components (including engines) had much higher internal prices than Saab’s own in-house-produced components to benefit other areas with lower tax laws. Saab’s financing company has not been included in Saabs accounts, and the list goes on. Clearly, argues the Swedish government, Saab was as healthy as it could be considering it was rigged by GM to show no profit in Sweden.

If the EU-commision accepts this report, and agrees following their own investigation, they have two months to make a decision to Saab’s fate. Commentators believe the conclusion will be positive, and that it will arrive before the end of this year.

Thor Johnsen
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  • Cthill Cthill on Nov 18, 2009

    There is nothing particularly unusual about this. All multinationals move the money around to the lest taxing jurisdiction. If I recall Toyota got fined for the same sort of thing by the Australian Tax Office about 10 years ago.

  • GS650G GS650G on Nov 19, 2009

    Are the Swedes surprised by this, angered, or looking for redress? No one, not even GM , is going to sit by and pay a tax if they can avoid it. This is the cat and mouse game we all play. There is the company, the shareholders, and the government. Pick any two as partners but never all three. Once SAAB is comfortably nestled in as a Swedish company again they can commence to picking the flesh from SAAB like in the good old days. Isn't that one of the reasons they ended up sold to GM before?

  • EBFlex At the summer property putting boats in the water, leveling boat lifts, cleaning the lots for summer, etc. Typical cabin stuff in the most beautiful place on the planet
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  • The Oracle Been out on the boat on Lake James (NC) and cooking up some hella good food here with friends at the lake place.
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