On January 5, 2024, the housing association received an enforcement decision from the Swedish Enforcement Authority for 10.7 million kronor, with total debts amounting to approximately 14.2 million kronor. In a letter dated January 18, 2024, the chairman admitted that the board had taken out credits that were not recorded in the books. The chairman left his post shortly after the enforcement decision.
The association was formed in 2019 after converting an old school building into twelve apartments. The initial board consisted of the responsible developer and a man whose company offers management and board support services, who prepared an economic plan and statutes for buyers. After the developer left the board, the other man remained as chairman and brought in another external board member from his own company. During this period, the chairman took out several loans in the housing association's name that were not reported in either the economic plan or annual reports. According to the chairman, the loans were recorded against the developer's settlement account and were supposed to be moved away later, but this never happened. One loan of six million kronor was taken from a lender offering quick business loans with high interest rates, and the former chairman managed to take out credits as the sole signatory, despite statutes requiring at least two board members to sign all agreements. Danske Bank states they have no obligation to check the housing association's statutes. The chairman claims the money went to the developer, but where it ended up is unclear, and it did not go to the housing association.
There are naturally good answers to this, it's no oddities. There are agreements that say what one should and should not do.
A few days after the enforcement decision, Klara and her neighbors filed a police report, but it took until summer for the case to reach the prosecutor's desk. A new board took over after the two entrepreneurs left with a mountain of debt, and an external consultant was brought in to save the economy, quickly gaining full authority over the board's work. The consultant began collecting so-called 'extra contributions' from members, raising nearly 3 million kronor from nine residents with the motivation that it would save the housing association. The money never went to the housing association but was instead transferred to the consultant's private account; the consultant has returned parts of the money, but over 1.3 million kronor are still missing. The board has now sued the consultant, who did not want to comment further, citing the ongoing legal process.
The two men have been involved in two other housing associations in the Stockholm area. One, Brf Karlskronaviken, was forced into bankruptcy after the developer mortgaged buyers' already mortgaged apartments with another lender, while in the other, members became suspicious early and voted the men out. It has been over two years since the events were reported to the police, but prosecutors have not yet filed charges, and several preliminary investigations have been closed. Hans Morgell, senior prosecutor at the Swedish Prosecution Authority's special fraud group, states there are several difficulties in investigating crimes in housing associations, including establishing a crime classification and requiring many resources to clarify what actually happened. The Swedish Enforcement Authority states it is not uncommon for a property to be sold at an enforcement auction while a criminal investigation is ongoing.
We follow good lending practices which among other things means we have an obligation to ensure that a housing association has repayment ability.
The other is that it requires many resources to sort out what actually happened. The two are of course connected. If I cannot sort out what has happened, it also becomes difficult to claim what crime I am alleging.