Financial Times on Swets

[Ann Okerson <ann.okerson@yale.edu>]

A couple of liblicense-l members have forwarded this message to me and 
asked that it be posted on the list.  This seems like a very serious 
situation. Ann Okerson/Moderator

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Swets at brink of ruin after accounting fault
Banks demand capital injection

(In the Dutch Financial Times, September 20, 2004)

GERBEN VAN DER MAREL

AMSTERDAM - Swets & Zeitlinger, Dutch distributors of scientific
information, are in trouble. The business needs refinancing after it was
found that it made losses in the past years.

As a consequence of the problems Swets no longer meets the credit
conditions of the bank. On Friday, shareholders will decide on a capital
injection of 45 million.

This is confirmed by Jan-Willem Baud, chairman of the board of supervisory
directors. Baud is the director of NPM Capital, which holds 26% of the
shares of Swets. Other shareholders are the Swets family (29%), Nesbic
(23%), Paribas (15%), and Alpinvest (7%). The business has approx. 1400
employees in 23 offices.

NPM has promised new money. Baud: "We believe that Swets can go on for
another hundred years in spite of the problems." Other shareholders are
still hesitant about whether or not they should jump to the rescue, says
Baud.

Already in May it became public that Swets had found 'errors' in their
books. And that hundreds of jobs will be scrapped.

Just last year Swets was still being offered for sale to international
high-risk venture capitalists with a price tag of hundreds of millions.
One buyer, Candover, pulled out in the last minute.  Swets is an
intermediary between scientific publishers and major users such as
universities. The company suffers from the increasing distribution of
information through the Internet. Attempts to become more electronically
active themselves have not panned out as predicted by the management.

The last figures published by Swets pertain to 2002, when - according to
the information - a turnover of 1.2 billion and a net profit of 30.8
million were achieved. Swets now has to review the figures over 2001,
2002, and 2003.

According to Baud, transactions between parent companies and subsidiaries
were processed incorrectly for years. Swets presently cannot give insight
into the adjusted results. As a consequence of debit transfers, which Baud
does not want to specify, Swets ends up in the red. "But non-recurring
items do not get us into loss. Profits do have to increase though."

Fraud, says Baud, was not discovered. Finance director Eelco de Boer is
said to have stumbled across errors of his predecessor after taking up
office last year. Whether these events will have consequences for director
Eric van Amerongen or other managers, Baud does not want to disclose ahead
of the shareholders' meeting next Friday.

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