German Klaus Schwab, the founder and chairman of the Board of Trustees of the World Economic Forum.
Image: Salvatore Di Nolfi
The World Economic Forum said Wednesday it has launched an investigation into fraud allegations against its founder Klaus Schwab that reportedly prompted his resignation this week.
The 87-year-old Schwab, who for decades has greeted presidents and tycoons at the annual forum in the Swiss resort of Davos, said there was "not a shadow of proof" for the accusations.
He added in a statement to the Swiss newspaper Blick that he had started defamation proceedings.
In a statement confirming a Wall Street Journal report, 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 longtime forum leader suddenly resigned on Monday, "with immediate effect". In a statement at the time, the WEF board hailed Schwab's "outstanding achievements" in his 55 years in charge.
But the WSJ reported that the move had been spurred by a board decision to investigate allegations of financial and ethical misconduct by Schwab and his wife Hilde.
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 used Forum-funded meetings "in order to justify luxury holiday travel at the organisation’s expense," the paper said.
The letter reportedly raised concerns about how Schwab treated female employees, and how his leadership allegedly allowed instances of sexual harassment and discriminatory behaviour to go unchecked.
Schwab had not reacted until his statement to Blick, which said: "There is not a shadow of proof for all these accusations."
"It is a pure and simple lie (to say) that I asked young employees to withdraw thousands of dollars for me at automatic distributors," Schwab added.
He said all personal expenses on his business trips were repaid and that he had started defamation proceedings.
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 said 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. Schwab said the handover would take until January 2027.
WEF said its vice chairman Peter Brabeck-Letmathe will serve as interim chairman as a search committee looks for a permanent replacement for Schwab.
Schwab was born in Ravensburg, Germany, on March 30, 1938. He studied at Swiss universities and at Harvard in the United States, and holds doctorates in engineering and economics, along with over a dozen honorary doctorates.
He was a little-known business professor at the University of Geneva when he in 1971 founded the WEF's precursor, the European Management Forum.
That first meeting reportedly drew fewer than 500 participants. Since then the event has swelled to attract thousands each year.
Schwab broadened the conclave by inviting top political and business leaders, representatives from trade unions and civil society, assembling a prestigious Rolodex as he turned the gathering into a networking showcase.
The WEF maintains that it "provides a global, impartial and not-for-profit platform for meaningful connection between stakeholders to establish trust, and build initiatives for cooperation and progress".
Critics meanwhile charge that WEF's gatherings simply create a safe space for the corporate world to lobby governments without oversight.
The annual event has fostered the concept of the "Davos Man", referring to the elite crowd of movers and shakers with global clout and reach.
And Schwab and the organisation he founded have long been the focus of conspiracy theorists.
Elon Musk, the multi-billionaire owner of X, said on the platform that Schwab "wants to be emperor of Earth".
Misinformation and disinformation topped the WEF's list of short-term global risks in its latest global risk report.
AFP