Known as the “Match King”, Ivar Kreuger was an incredibly ruthless businessman. In 1907 he founded a match company and set out to build a monopoly. He did not just intimidate his opponents in the boardroom, he arranged for rival companies to have their supplies stopped or, worse, their employees beaten up. The First World War was good for his company, Svenska Tandsticks AB, and by 1928 Kreuger was responsible for 65 per cent of the world’s supply of matches with factories in 34 countries and a huge headquarters in Stockholm. He lived a jet set lifestyle with fast cars and even faster women all over Europe.
Through his company Kreuger and Toll, founded in May 1908, he loaned money to poor countries. In return he had sole rights to manufacture and distribute matches in those countries. He loaned £15 million to France in 1927, £1 million to Greece in 1926, £7 million to Hungary in 1936 and £4 million to Yugoslavia in 1928 among many other imprests. In 1929 he became the major shareholder in the telephone firm, Ericsson, a gold mining company and a bank.
In a methodology that would be repeated years later by companies such as Enron (search the article), Kreuger reported vast profits for his companies when there were none and paid huge dividends using new investment or the finances of a newly acquired business. In 1929 he was said to be worth thirty billion krona and by 1931 he controlled more than 200 companies. In October 1929 Wall Street crashed and eventually it began to have an impact on Kreuger’s business.
In 1931 the financial world was awash with rumours that all was not well in the Kreuger empire. He went to the Swedish banks to ask for a loan but was refused. The Bank of Sweden went further and demanded a complete set of accounts and also insisted that Kreuger return from America and meet the bank chairman personally.
Fearing exposure, he travelled to his apartment at 5 Avenue Victor Emanuel in Paris where, at 11am on 12 March 1932, he committed suicide by shooting himself in the heart. He was ten days past his 52nd birthday. He left a suicide note that read, “I have made such a mess of things that I believe this to be the most satisfactory solution for everybody concerned… Goodbye and thanks.” Krueger’s companies went bankrupt at the end of March 1932 and claimed assets of $250 million proved to be non-existent.