TALLINN - An internal investigation by the SEB Group, owner of Eesti Uhispank, has failed to uncover any favorable lending terms for Tallink while Ain Hanschmidt was the bank's CEO.
Hanschmidt, who quit the bank earlier this year, recently acquired a large interest in a little known firm that controls part of Tallink, the largest passenger ferry operator in the Baltics. Hanschmidt acquired the stake through an apparent option deal for approximately 10,600 euros, though the real value of the stake is some 45 million euros.
The ultra-favorable deal for Hanschmidt immediately raised flags that Tallink executives might have promised him a sweetheart deal in exchange for favorable loan terms in the mid-1990s when the shipper was in dire financial straits.
Financial authorities, however, said they still had unanswered questions. Andres Trink, chairman of the Financial Supervisory Authority, said the circumstances of the deal still needed clarification. He said it was necessary to find out whether Uhispank observed all requirements of the Crediting Institutions Act during Hanschmidt's leadership.
"We will further clarify circumstances pertaining to details of the SEB internal audit as well as of additional particulars the audit does not reflect," he told the paper.
But SEB, the second largest banking group in the Baltics, say in its report that the Hanschmidt-led bank did not extend any favorable loan conditions to Tallink, but it claims it didn't know of Hanschmidt's shares in Tallink's owner.
The bank's internal audit found that, while Hanschmidt was at the helm, credit committee decisions were made in compliance with relevant instructions and regulations, as well as in accordance with the regulations valid at SEB and SEB Eesti Uhispank, the group said in its report.
It was also established that loan and investment transactions with the companies of Tallink Group were executed on market conditions in conformity with law and the requirements established by the bank.
As borrowers, all Tallink Group companies were treated on the same basis as the bank's other large clients, SEB said.
In addition, Ain Hanschmidt's declarations of economic interest were presented at the stipulated terms for every year starting from 2000, when the respective requirement was introduced, up until the time Hanschmidt left the bank.
Meanwhile, Bank of Estonia President Andres Lipstok refused to give extensive commentary on how Hanschmidt unexpectedly became shareholder of a spa operator in which Lipstok is also an owner.
"As I have earlier explained, deals of the sale and purchase in companies are made by concrete legal or physical persons, and comments of the price or terms of the deal can be commented by the same parties to the deal. I have not been a party in the said deal, therefore I am not the right person to speak about this issue," Lipstok told the Baltic News Service.
The Eesti Ekspress weekly wrote that Ain Hanschmidt acquired a quarter of OU Haapsalu, a company whose other owners are Urmas Sukles, Toomas Vilosius and Lipstok with 10,000 kroons (640 euros).
The company operates the 400-bed TopSpa hotel in Tallinn, the Fra Mare holiday and health center in Haapsalu and is also a shareholder in the Laine rehabilitation treatment center.
The 25 percent holding acquired with 1,000 kroons two weeks ago gave Hanschmidt the right to a 3-million kroon share of the company's profits, the weekly wrote.
Hanschmidt bought the holding from Maret Sukles, wife of Urmas Sukles.
Lipstok has refused to comment on any possible conflict of interest during Hanschmidt's term of office as a bank leader, when the bank covertly financed companies connected with Hanschmidt.
