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Swedish government official resigns

As the trading scandal involved Nordic investment bank D. Carnegie & Co. AB, its former employee, a senior Finance Ministry official, resigned Wednesday.

State Secretary Urban Funered said he left his post to keep allegations of financial wrongdoing against Carnegie of tainting the government's efforts to sell off stakes in major Swedish companies.

Carnegie had been helping the center-right government in divesting stakes in stock market operator OMX AB and mortgage company SBAB. The company asked to be relieved from the assignment late Tuesday, saying it was in "the best interest of our client."

Carnegie was Friday ordered to clean out its board and chief executive after the Swedish Financial Supervisory Authority found it had exaggerated its trading results by some 630 million kronor (EUR69 million; US$98 million) between 2005 and 2007.

It also received a warning and was fined 50 million kronor (EUR5.4 million; US$7.7 million).

In addition, the Stockholm bourse has asked its disciplinary committee to investigate whether Carnegie broke Swedish trading rules by communicating wrongful financial information. If found guilty, Carnegie risks a warning, fines or even be forced to delist from the Stockholm stock exchange.

Funered, a close aide to Financial Markets Minister Mats Odell, was involved in the project to reduce state ownership in Swedish companies.

The government has put up a total of six companies on its sales list, including its listed stakes in telecom operator TeliaSonera AB, Nordic banking group Nordea AB and OMX.

It also includes the sale of unlisted assets SBAB, real estate group Vasakronan AB, SBAB and liquor group Vin & Sprit AB, the maker of Absolut vodka.

"If I would continue as state secretary there would be a risk that the criticism directed toward Carnegie would spill over on the important project to reduce state ownership," Funered said in a statement.

He previously had worked as a group compliance officer and corporate lawyer for Carnegie between 1999-2007. Funered will transfer to another job as an expert in the government, the Finance Ministry said.

He was the second government official to resign over links to Carnegie. On Monday, the chairwoman of the government's council for divesting state-owned companies, Karin Forseke, stepped down due to her former job as Carnegie chief executive.

Later Wednesday, Carnegie's Chief Financial Officer Ulf Fredrixon announced he would leave his post. Fredrixon had only been on the job since March 1, but had worked in the company for 20 years within accounting and finance. He will be replaced by Bo Haglund as acting CFO.

Carnegie was not immediately available for further details.

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