PKA buys out Genan founder – but has it been duped?

Bent Nielsen is no longer a shareholder in the tyre recycling company he set up after Denmark’s PKA (Pensionskassernes Administration A/S) acquired his 52 per cent stake in Genan yesterday; with this added to its existing 48 per cent share, Genan is now firmly in the pension fund administrator’s hands – but today PKA allegedly claimed that both Genan and Nielsen have duped it over a number of years.

PKA decided to double its stake in Genan to ensure the financially troubled company’s continued existence. Operating company Genan A/S and its sister firm Genan Business & Development A/S, which handles business development and sales of turnkey plants, finally released results for the 2013 year yesterday after delaying publication of these due to financial woes. The 2013 results show an after tax result of DKK 30.3 million (£3.3 million) for Genan A/S, down from DKK 31.0 million, while the loss recorded by its sister company almost doubled year-on-year. Genan Business & Development A/S achieved a result after tax for 2013 of DKK -112.8 million (£-12.1 million) compared to DKK -62.6 million (£-6.7 million) in 2012. Its company equity at the end of 2013 was DKK -136.6 (£-14.7 million), million compared to DKK -23.9 million (£-2.6 million) the previous year.

Upon announcing the share acquisition, PKA chief executive officer Peter Damgaard Jensen expressed relief that a solution to Genan’s financial situation has been found. “This matter has been a large effort over many months, and it has been a hard process that we at PKA could have done without,” he shared in a statement issued 14 August. “We are not used to being involved in cases like this. But now there is a solution that we and the banks are happy with, and now it is about calming the situation and clarifying how we can now best manage the business. Because we still believe in the business idea behind Genan.”

Prior to the publication of Genan’s results and acquisition of Nielsen’s shareholding, PKA and Bent Nielsen agreed that the latter would step down from Genan management; Nielsen resigned as chairman of the company’s board on 16 June and was replaced by Jens Kampmann. On the same day, Morten Amtrup was named interim group managing director. Bent A. Nielsen and Kent T. Nielsen resigned from the Genan board on 14 August.

The purchase price of Nielsen’s shares wasn’t disclosed – Genan noted in a statement that the price will “depend on the future development of the value of the Genan companies in question.”

‘Doctored’ accounts?

But after only one day, the “value of the Genan companies in question” has been called into question. This morning, Danish media reported Peter Damgaard Jensen as saying PKA feels “duped” by Genan as it has discovered the recycling company doctored its books over an extended period of time, and that Bent Nielsen hid a shareholder loan of several hundred million krone from the pension fund. Nielsen has not commented on this allegation.