Eniro Suffers a Series of Unfortunate Events

The Nordics search and directory company Eniro has suffered a series of increasingly embarrassing developments in recent weeks. It began back in July with a “disappointing” second quarter earnings result, which led to a management shake-up. In mid-August the company announced that it has reached a “mutual decision” to part ways with CEO Johan Lindgren, replacing him on an interim basis with Stefan Kercza, who was acting head of Eniro.se and president of Eniro Denmark.

The bomb arrived late last week when the company announced that it had discovered “accounting inaccuracies” that required it to scale back profit forecasts, leading to a huge sell off that wiped out about a third of the company’s market value. Eniro said it was considering inviting an investigation by Swedish authorities.

Further, according to news reports, the company’s chairman Lars Johan Jarnheimer amended Eniro’s earlier statement that Lindgren’s departure was “mutual” saying the former CEO was in fact dismissed.  The company also announced Lindgren’s severance package was being cancelled.

The original announcement of Lindgren’s departure said simply that the company needed to move from an emphasis on cost cutting and debt reduction to a focus on growth, a role for which Kercza was deemed more suited.

Lindgren’s tenure was just shy of four years. He was named Eniro’s CEO back in September 2010, replacing Jesper Kärrbrink. At the time, Eniro’s board felt Kärrbrink, who had served since May 2008, lacked the credibility with the financial markets Eniro needed as it faced debt issues and other financial challenges. Lindgren was seen as a seasoned financial manager. His previous position was CEO of Telenor Svierge AB, with prior experience as a public company CFO.

Here is what then Eniro Chairman Lars Berg said at the time of Lindgren’s appointment.

“Our strategy remains unchanged, we are determined to continue developing our opportunities, with particular emphasis on online. Jesper Kärrbrink has played a vital role in initializing this process and we are grateful for his contributions during the two years he has been CEO. However, in light of these new financial challenges, the Board of Directors believe it is necessary to appoint a new CEO with relevant experience to implement the strategy. We are confident that Johan Lindgren possesses the skills and experience to lead Eniro through the next step in the transformation.”