The Estonian State Audit Office (SAO) says in its new annual report that while the Estonian state was the sole owner of 27 companies and had partial ownership in 11 more companies as of April 2013, the state doesn’t often direct their activities, reports Postimees Online.
The audit indicated that the owner has often failed to set aims for the state-owned companies and nearly a half of the audited companies, including electricity giant Eesti Energia, for example, lacked a strategy approved by the company’s councils.
This has not been an obstacle for the companies in investing and the state for allocating hundreds of millions of euros to them to do so. In the past two years, all state-owned companies have invested around 2.7 billion euros, which exceeds the investments made from the state budget. In the period of 2006–2012, the state has allocated to the audited companies around 227 million euros from the state budget. The SAO said that it is unclear, regarding the companies that lack a strategy, on the basis of what aims and information the boards and councils of these companies have made their decisions and the owner invested money in the company.
Boards of companies have pointed out that the council and the owner are often not an equal partner to the board, not being able to control the activities of the board and expressing an expert opinion in investment in strategy decisions.
The SAO concludes that directing and owner supervision of state-owned companies hasn’t improved in the past five years.