TALLINN - Recent polls conducted among opinion leaders and society show that there are contrary views of former banker Ain Hanschmidt's suspicious deal in acquiring ownership in passenger ferry operator Tallink. Three out of four people questioned by the Baltic News Service and Faktum condemn the deal.
Ain Hanschmidt, who led Estonia's second largest bank SEB Eesti Uhispank since its establishment in 1992, took up a management position in Tallink in August this year and received a large stake in a firm that controls part of Tallink. Neither Hanschmidt nor Enn Pant, former head of Tallink, have explained how it was possible to acquire a stake worth about 45 million euros for only 10,600 euros.
Faktum sociologist Juhan Kivirahk said that such incidents arouse public opinion. According to their research, 73 percent of the 405 polled condemn the deal, 3 percent believe it's fine to use business networks for personal interest, 15 percent are indifferent and 9 percent have no opinion on the matter.
A total of two-thirds of the respondents were aware of the Hanschmidt deal (84 percent of Estonian speaking and only 22 percent of Russian speaking respondents).
The deal would have been "fine for the days when people had a much more Soviet kind of thinking," said Joakim Helenius, chairman of Trigon Capital investment services company. "But they are all to be equally condemned now. Individuals are starting to realize that what was done in the '90s was wrong and unacceptable."
"It would appear that, technically, he did not break any laws, but it is very obvious that it was ethically wrong," he added. "A banker, like politicians, is in a position of trust, and it is very easy to abuse a position of power, especially when loan decisions are made. One way of bribing is to offer people with influence attractive deals. The deal offered to Hanschmidt, to buy shares in a holding company, is not what I call market terms."
But Helenius, who has Finnish roots, stressed, "The fact is that Estonia has made much progress in overcoming the corruptive attitude that is still so common in many East European countries."
Other analysts seemed to agree.
"There is nothing that special about this deal," said Lauri Lind, head of the stock markets department at Hansapank. "Many things happened between 1995 and 1998 that are not contrary to the legislation. The question is about ethics."
According to Livia Kulm, spokeswoman for the Financial Supervision Authority, Hanschmidt has not been reachable for further questioning. Thus, a final statement might take weeks to accomplish.
Skandinaviska Enskilda Banken, the owner of SEB Eesti Uhispank, announced last week that, according to their internal audit, Hanschmidt did not extend any favorable loan conditions to Tallink. What's more, the bank did not know of Hanschmidt's interest in Tallink's owner.
Juri Mois, former head of Estonia's largest bank Hansapank, said that hiding involvement in companies was typical business practice in those days. Mois was a member of Parliament and the Tallinn city mayor for some time, and is currently involved in his own transit business.
"I have lived my life according to market terms. It enables me to avoid nonsense," he told The Baltic Times. " When Hansapank lent money to Norma (a seat-belt producer), and Hansapank employees bought Norma's stocks, we never caused any problems. But currently, there is suspicion that the price paid for the shares was different from that of the market price."
He said that if former Tallinn mayor Edgar Savisaar could buy a nice summer cottage at market price, then it should be acceptable that shares were bought for under market price.
"If society accepts the mayor's deal, both should be handled equally," he added. "Besides, Hanschmidt's deal was done earlier when such things were more acceptable."
Mois said he admires Hanschmidt for supporting Tallink's forerunner, Hansatee, which was not transparent enough to safely receive a loan from Hansapank in those days.
European Commission Vice President Siim Kallas, who was the former prime minister and president of the central bank, told BNS that Hanschmidt's case was a question of ethics and internal rules of the private sector. This, he emphasized, had to be treated in the light of other major business scandals such as Enron or Parmalat.
The difference between countries is not with corruption itself, but how cases involving corruption are handled, he said.
According to some speculation, Tallink's shares will be quoted on the Helsinki Stock Exchange later this year. The price of a Tallink share is already 70 kroons (4.5 euros) when purchased through Hansapank.
Rain Tamm, partner with investment bank LHV, said that a fair price could be between 65 - 75 kroons per share, and the market value of the company could be between 460 million 's 530 million euros.
"The price is not high if there is an optimistic forecast and good profit growth," said Lauri Lind.
Lind believes that Hanschmidt's case will have no impact on the stock offering since it has not influenced the company's core business.