State Secretary Urban Funered said he left his post to prevent allegations of financial wrongdoing against Carnegie, his former employer, from tainting government efforts to privatize a number of major Swedish companies.

Carnegie has helped the center-right government divest its stakes in stock exchange 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."

Regulators ordered Carnegie to remove its board and chief executive Friday after finding the company had exaggerated its financial results by some 630 million kronor ($98 million) between 2005 and 2007.

The company was fined 50 million kronor ($7.7 million).

The Stockholm stock exchange has now asked its disciplinary committee to investigate whether Carnegie broke Swedish trading rules by communicating wrongful financial information. Carnegie risks fines and or delisting from OMX if that is found to be the case.

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 on the sales block its stakes in companies ranging from telecom operator TeliaSonera AB to 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.

Funered 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. She had been chief executive at Carnegie.

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.