Portugal Colonial - WEF confirms investigation into claims against founder Schwab

In a statement confirming a report by the Wall Street Journal, the WEF said its board of trustees "unanimously supported the Audit and Risk Committee's decision to initiate an independent investigation following a whistleblower letter containing allegations against former Chairman Klaus Schwab".

The WEF, which hosts the annual meeting of wealthy, famous and influential global elites at the luxury Swiss ski resort of Davos, initially provided no explanation when it announced Monday that its longtime chairman had stepped down from the board with immediate effect.

In the first statement, the WEF's board hailed Schwab's "outstanding achievements" in his 55 years in charge.

But the WSJ reported that the decision had been prompted by a board decision to investigate allegations of financial and ethical misconduct by the longtime leader and his wife Hilde.

Schwab denies the claims, the paper added.

The letter, said to have been sent by anonymous current and former WEF staff, "included allegations that Klaus Schwab asked junior employees to withdraw thousands of dollars from ATMs on his behalf and used Forum funds to pay for private, in-room massages at hotels," wrote the WSJ, which said it had seen the letter and spoken with people familiar with the case.

"It also alleged that his wife Hilde, a former Forum employee, scheduled 'token' Forum-funded meetings in order to justify luxury holiday travel at the organisation’s expense," the paper said.

- Emergency meeting -

The letter also reportedly raised concerns about how Schwab treated female employees, and how his decades-long leadership allegedly allowed instances of sexual harassment and discriminatory behaviour to go unchecked.

Schwab could not immediately be reached for comment but according to the paper, he had vehemently denied all the allegations and warned board members he would sue if they pursued an investigation.

Despite this, the board of trustees decided at an emergency meeting on Sunday to open a probe, and Schwab opted to resign immediately.

In its statement Wednesday, WEF stressed that its decision "was made after consultation with external legal counsel and in line with the Forum's fiduciary responsibilities".

"While the Forum takes these allegations seriously, it emphasises that they remain unproven, and will await the outcome of the investigation to comment further."

Schwab had already stepped down as executive chairman last year, with Norway's former foreign minister Borge Brende taking over daily management.

A few weeks ago, the 87-year-old Schwab said he would step down as non-executive chairman but with the handover lasting until January 2027.

WEF has said that vice chairman Peter Brabeck-Letmathe will serve as interim chairman as a search committee looks for a permanent replacement for Schwab.

V.Dantas--PC