As Proper Group AG battles bankruptcy in the Swiss courts, sources have revealed that a long term advisor to the company, Peter Löhr, was previously convicted of embezzlement in a Swedish scandal.
Löhr - who has a very minimal online footprint - has been a constant presence throughout the company’s chequered history, serving as a “general advisor” to former CEO Mattias Hjlemstedt, and somehow surviving round after round of culls of senior executives that has seen the zombie company fall from a supposed $2.5 billion valuation and hundreds of employees to the ‘barely-there’ status of today, with only a skeleton team left in Switzerland.
Throughout the rise and fall of the company formerly known as Utopia Music, Löhr has somehow managed to remain in place as a trusted advisor to a string of executives who have tried to turn the business around, and continues to advise John Mitchell, a key investor in the business who was the board chair of Proper Group AG prior to bankruptcy proceedings being instituted against the company in the Swiss courts. After this article was published, John Mitchell emailed to say "Peter Löhr does not advise John Mitchell", adding, "prior to his appointment at Utopia, and hired by Mattias Hjelmstedt, Peter Löhr advised of his history which occurred 20+ years ago where he had fulfilled all the obligations made of him".
Sources have characterised Löhr as an “enforcer” tasked with doing dirty work as and when needed, including issuing legal threats to anyone critical of Utopia’s business, as well as being involved in processes around firing staff, negotiating settlements and strong-arming former employees into confidentiality agreements. It is also believed that Löhr was one of the executives who pulled together the bankruptcy appeal. Yesterday, John Mitchell told CMU that the appeal had involved “a 200 page document that a small group of executives worked tirelessly on for ten days”. In his email, John Mitchell claims that this is "libellous and incorrect", adding "the board of Proper Group AG retained Staiger Law and Homburger AG, two Swiss law firms, to work on the appeal".
Löhr’s name has come up repeatedly in conversations with many sources associated with Utopia, with many former employees apparently aware of Löhr’s colourful past.
Over the last twelve months or so, coverage of Löhr’s previous conviction has gradually been erased from the internet - described by one source as “a clean-up job” - with only a couple of online media still publishing details of the charges that led to that conviction. However, CMU has been able to confirm details of Löhr’s past with numerous independent sources.
According to contemporaneous coverage in the Swedish press, Löhr was a “well known and talented lawyer” and member of the Swedish Bar Association, tasked with managing bankrupt companies on behalf of the state. After embezzling 3 million kroner from the bankrupt companies, Löhr apparently laundered the money through the bank accounts of associates, before using the proceeds to buy a villa.
When the fraud was discovered, Löhr was sentenced by a district court in Sweden to time in prison.
As the recent bankruptcy drama has unfolded, a number of sources have contacted CMU to point out that, with the company under incredible scrutiny by the Swiss authorities, creditors and investors, it seems remarkable that John Mitchell - a trusted financial services professional with significant experience and acumen, who runs Australia-based Mitchell Asset Management - would risk derailing Proper Group AG’s bankruptcy appeal with this sort of association. In his email, Mitchell also characterised this paragraph as "libellous and incorrect", though without highlighting any specific inaccuracies in the text.
With further details on the Swiss bankruptcy expected in coming days, it will be interesting to see what view the Swiss authorities take on Löhr’s involvement with Proper Group AG.
Proper Group AG investor John Mitchell emailed this morning to request that we clarify the following points raised in this article.
"Prior to his employment at Utopia, and hired by Mattias Hjelmstedt, Peter Löhr advised of his history which occurred over 20+ years ago where he had fulfilled all obligations made of him. The board of Proper Group AG retained Staiger Law and Homburger AG, two Swiss law firms, to work on the appeal. Peter Löhr does not advise John Mitchell. The company is currently subject of an appeal before the courts. The company had at its peak some 1400 staff globally, today it has around 227, whose footprint is aligned to our customers, UK, US and Australia. I am aware of less than 3% of the staff that have a grievance or have taken matters further."
"I stress for you, the old is gone, I removed the founders and those board members who were responsible for a failed strategy, I removed those executives and C-suite that were ineffectual or only there for self-enrichment. As a shareholder I have perfect alignment of interests as a director and chairman, the board only consists of individuals with substantial skin in the game (as opposed to the past), the executives that remain are both passionate and loyal to the industry and see the need for change. No former C-suite had made any cash investment in the company, they just took a salary (enormous), the founders received founder shares, the succession of CEOs received salaries, the previous CEO was involved in capital raising which delivered up a very small holding. The board has close to €88 million at risk hence the drive to succeed."