Director of Novator Finland amazed at Elisa Board’s course of action

Board to keep articles change on agenda for shareholders' meeting

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The Icelandic company Novator is amazed at the decision made on Thursday by the Board of Directors of the telecommunications service provider Elisa to keep the highly contentious issue of the proposed amendments to Elisa’s articles of association on the agenda of the upcoming extraordinary shareholders’ meeting, even though Novator - the instigator of the amendments - had wanted to remove the issue from the list of items.
      "It is acceptable that some of our proposals meet with resistance, while it is rather strange that an item that we wanted to remove due to such opposition has been left on the agenda", noted Orri Hauksson, the Director of Novator Finland Oy.
     
At the end of November, Novator Finland, owned by the Icelandic investor Thor Björgólfsson, demanded that certain amendments to Elisa’s articles of association should be made, in order that the company could be restructured.
      The proposed amendments were supposed to be on the agenda of the Extraordinary General Meeting to be held on January 21st 2008.
      On January 9th Elisa received a notification stating that Novator Finland Oy has amended its proposal to the EGM and will not propose amendments to the articles of association at the upcoming meeting.
      Pekka Ketonen, the Chairman of the Elisa Board, expressed discontent with the new development on Wednesday evening.
     
"It happens to be so that the party who has proposed an issue to be discussed by the Board is legally entitled to remove it from the list of items", Hauksson argues.
      No doubt the Board of Elisa has its reasons for not removing the issue of the proposed amendments to Elisa’s articles from the agenda. It will naturally be difficult for Novator to demand later that the issue should be re-discussed, if the Board bluntly rejects it now.
      The criticism Novator has expressed lately towards Elisa has been focused on Chairman Pekka Ketonen in particular, while Novator would be willing to retain a major part of the other members of Elisa’s incumbent Board.
      The fate of the Board will apparently be the key question of the EGM, provided that Novator does not insist on having further amendments to Elisa’s articles of association.
     
Nobody can do more than speculate what will eventually happen at the EGM. The largest Finnish owners of Elisa would like the present Board to continue in their seats, and to support this opinion, some representatives of owners have started collecting proxies from other shareholders.
      Were Novator to succeed in removing the present Board of Directors, in other words were it to get more than half of the votes at the EGM, it is possible that a rival list of names would still appear on the table, competing with Novator’s proposal for a new Board.
      While Novator and some other large owners of Elisa are discussing suitable candidates, other major owners feel that it would be advisable to appoint a new Board at the statutory general meeting which is to take place later in the spring.
      Then a proposal for new member candidates would be prepared in the normal fashion and the shareholders would be informed of the list in good time prior to the meeting.
      Currently, the only name that Novator has revealed from among its list of candidates is the 36-year-old Orri Hauksson.
     
According to a widespread belief, the two new members who were placed on the Board in 2006 - Kemira Director-General Lasse Kurkilahti and Turku lawyer Matti Manner - were Novator’s candidates.
      However, Thor Björgólfsson, the Icelandic main owner of Novator, denied this notion in an interview with Helsingin Sanomat a week ago. So does Kurkilahti himself now.
      "Of course I do not represent Novator on Elisa’s Board of Directors. When I joined it, nobody knew anything about the company called Novator", confirmed Kurkilahti, who retired from Kemira at the turn of the year.
     
The convoluted saga of the Icelandic investors and the Finnish telecoms operator has been covered in several previous articles, a selection of which are given below.


Previously in HS International Edition:
  Elisa Board Member expresses disapproval of policy chosen on corporate restructuring (13.12.2007)
  Icelandic shareholders hope to restructure management of telecom company Elisa (26.11.2007)
  Icelanders offer compromise in initiative on Elisa changes (10.1.2008)
  Icelandic investor attributes Elisa uproar to "nationalism" (7.1.2008)
  Large Finnish pension insurers are suspicious of Novator’s intentions for Elisa (14.12.2007)

Links:
  Elisa Stock Exchange Bulletin: Matters to be Addressed at Elisa Extraordinary General Meeting

Helsingin Sanomat