February 10, 2015 / 7:01 PM / 5 years ago

UPDATE 1-Swedish tissue firm SCA's CEO steps down after media storm

(Adds comments by Johansson, background)

STOCKHOLM, Feb 10 (Reuters) - Swedish hygiene products firm SCA said on Tuesday Chief Executive Jan Johansson would step down as a preliminary investigation by a public prosecutor distracted him from focussing on the business.

He will be replaced by the head of the company’s European consumer goods unit.

SCA has been in the spotlight over media allegations of extravagant spending by management on foreign travel and on hunting trips in northern Sweden. Last month a public prosecutor launched a preliminary investigation into the allegations against.

“The last months I have spent a large part of my time on the ongoing audits related to SCA,” Johansson said in a statement.

“A preliminary investigation has also started, which means that the ability to focus on the business has been further reduced.”

SCA’s board said in a statement it had no new information related to the audits and that it had continued confidence in Johansson.

He will be replaced by Magnus Groth, head of SCA’s Business Unit Consumer Goods Europe, who will take over on March 1.

Johansson is the second casualty of the scandal. Late last month, SCA Chairman Sverker Martin-Lof quit his post and all his other board positions, including that of chairman of Industrivarden.

Industrivarden is one of Sweden’s most powerful investment groups with large holdings in a number of top firms including truck maker Volvo, telecom gear maker Ericsson and engineering firm Sandvik among others.

Corporate excess is frowned on in egalitarian Sweden and the allegations against SCA have been front-page news.

In the latest of a string of revelations, daily Svenska Dagbladet reported late in January that Johansson and his daughter had used SCA’s corporate jet to fly to the soccer World Cup in Brazil last year.

Johansson told the paper the purpose of the trip included reviewing strategic expansion options.

The paper had earlier reported that SCA built luxury hunting lodges in northern Sweden for the use of company executives.

It said chefs were flown in for lavish dinners, a corporate jet was sent back empty to Stockholm to pick up a forgotten wallet and hunting dogs were ferried in by helicopters.

SCA said in January it had changed its policy regarding the use of company planes.

Sweden’s financial services watchdog has launched a probe into whether the chief executive of Nordea, the region’s biggest bank, acted improperly by accepting hunting trips organised by SCA. (Reporting by Simon Johnson; editing by Susan Thomas)

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