Sweden's Princess Victoria was allegedly groped by a French photographer from the Swedish Academy, the body that awards the Nobel Prize for Literature.
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Three people told local media they witnessed photographer Jean-Claude Arnault placing his hand on the princess' bottom at the event when she was just 27. The princess is now 40.
"He came lurking from behind and I saw his hand land on her neck and go downward. It was all the way down," witness Ebba Witt-Brattström told the Daily Telegraph.
She said one of the princess' aides saw it happen and quickly leapt into action.
"She just flew herself on Arnault. She grabbed him, and 'whop', he was gone. The Crown princess turned in surprise. I guess she had never been groped. She just looked like 'what?'"
In November, 18 women came forward with allegations that Mr Arnault had groped or harassed them. Mr Arnault denies these claims.
Since November, six members of the Academy stepped down over the controversy.
Ms Witt-Brattström said on the princess' next visit in 2006, her ex-husband and former Academy secretary Horace Engdahl was instructed to make sure the princess was never left alone with Mr Arnault. Mr Engdahl maintains he was unaware of harassment claims against Mr Arnault.