Failed German Sonera deal haunts Finns

Finance Minister Sauli Niinistoe on Aug. 19 admitted the Finnish state was partly to blame for the failure of a multi-billion-euro investment venture in Germany by state-owned telephone operator Sonera.

Niinistoe said the state's representative on the Sonera board failed to voice any objections to a plan to invest more than 4 billion euros in European next-generation mobile phone licenses.

"It seems to be the fact that the state's representative on the Sonera board, from the Ministry of Communications, didn't react to the decision on the investments," Niinistoe told AFP.

"If that's the case, it's in a way silent acceptance, as the lawyers put it," Niinistoe said.

He however denied that this implicated the government in any way, stressing that the liability lies with civil servants in the Ministry of Communications.

As late as last week, Prime Minister Paavo Lipponen rejected the notion that his government held any blame in connection with the loss.

In 2000, Sonera invested more than 4 billion euros in a joint third-generation (3G) license using Universal Mobile Telecommunications System (UMTS) technology in Germany with Spain's Telefonica.

The 3G mobile phone services offer high-speed wireless Internet connections and audio and video streaming capabilities.

Sonera also acquired UMTS licenses in Finland, Italy, Norway and Spain.

But in July, Sonera, of which the state owns 52.8 percent, wrote off the German venture - one of Finland's biggest investments - as a 4.3 billion euro loss.

Sonera chief executive Harri Koponen announced in a press conference July 25 that the move was in response to increasing costs in 3G investments and delays in the technology.

The pullout set off a flurry of finger-pointing among the country's press and politicians, with the opposition Center Party insisting the government under Lipponen, a Social Democrat, should step down if it had any responsibility in connection with the loss.

Following the outcry, the government reluctantly agreed it would answer questions on the matter in Parliament on Sept. 3, where it will also face a vote of confidence. However, it enjoys a clear majority in the legislature.

Parliamentary elections in the Nordic country are scheduled for March next year.

Finland's chancellor of justice, the attorney general responsible for the public sector, has launched an investigation into the government's role in the failure.

Currently he is questioning 25 current and former ministers as well as a number of high-ranking civil servants, and is set to issue a report on his findings next month.