Division of Erkko's estate could bring a new ruler to Sanoma
For many years, Aatos Erkko was Finland's wealthiest man, but he nevertheless claimed a healthy loathing for the stock market
By Teemu Luukka
For years on end, Aatos Erkko - the former editor-in-chief of Helsingin Sanomat and the chairman and largest individual shareholder of the Sanoma media group - was the wealthiest man in Finland.
He was also the individual who paid the most in tax in Finland during the years of the new century.
Following his death at the age of 79 at the weekend, Erkko's estate will now be divided out.
The value of his assets changes on a daily basis, but at present it is thought to be worth in the region of EUR 600 million.
Of this, around EUR 300 million is tied up primarily in international securities managed by an investment company registered in Switzerland.
A few tens of millions of euros are in the stock of companies other than Sanoma.
Owing to the European sovereign debt crisis, 2011 was a year in which stock markets declined across the board.
Sanoma's market capitalisation as of May 7th was EUR 1,168 million, so the value of Erkko's Sanoma shares has fallen from a figure of around EUR 500 million last summer to something like EUR 270 million today.
As recently as a few years ago, Erkko's assets were said to be worth more than a billion euros.
Even though the sums have shrunk, the central weight of Aatos Erkko's ownership has remained unchanged: at his death he was comfortably the largest single owner of what is Finland's largest media concern, holding just over 23% of the Sanoma stock.
The real importance of Erkko's earthly possessions lies not in the number of noughts, but in how he has chosen to divide up his inheritance.
The key question is who will become the main owner of Sanoma, and by inference of Helsingin Sanomat, the largest newspaper by circulation in the entire Nordic region.
One possible person to inherit is his widow Jane Erkko. Aatos and Jane Erkko married in 1959, but did not have any children.
If Erkko's property is transferred to a foundation or foundations and not for instance to family members, it might mean for some branch of, say, education or science a very large windfall indeed.
This is all speculation, of course, since for the present the answers to these questions are known at best by a very small number of people within Aatos Erkko's inner circle.
Nevertheless, some rough conclusions might possibly be drawn from the nature of the man himself, and from the way in which Aatos Erkko approached money.
For him, money was never an object in itself. The essential thing was what could be achieved with it.
In 1965, he took charge of a Sanoma Oy that was not in the greatest financial health.
Together with Jaakko Rauramo and others, Erkko forged from the ailing media company a journalistic and economic success story.
When the profits started to roll in, money was ploughed back into the company.
The dividends policy towards shareholders in those days was less than open-handed - the central function of any money left over was to secure the quality of the journalism and the paper's independence.
Erkko took the view that the personnel, too, should be getting a share of the spoils.
Before Sanoma was listed on the Helsinki Stock Exchange, the annual report always contained a table - in a very prominent position - that reported how the personnel fund set up at Erkko's initiative and run by the employees received more from the company in profit bonuses than the shareholders got in dividend income.
In his own way, Aatos Erkko was a peculiar investor in stocks and shares, in the sense that he was regularly to be heard fulminating against the bourses, even though he did take his family company to listing in Helsinki in 1999.
He often declared that for him the idea of speculative trading in shares was somehow irresponsible.
He also voted with his feet on the matter: if the organisers of the closing party for the journalists' school had unwisely chosen the restaurant at the HSE as the venue, Erkko would announce that he was unfortunately prevented from attending.
He would prefer to spend this particular evening in the queue for the hot-dog stand or chatting in a local bar with a publican of his acquaintance.
Finland's richest man was also famously a familiar sight around town in the parks, travelling on buses and trams, and seated in the cafés in downtown Helsinki.
As often as not, he was alone.
Aatos Erkko did not "throw it about", and he did not relish or miss the spotlight.
As a media magnate, he was a very private man in life, even described as shy and retiring.
His funeral is likewise hardly expected to be a large and showy affair.
In 1999, Sanoma Oy, the publishers WSOY, and Helsinki Media Company merged to form the listed company SanomaWSOY.
Sanoma Oy had large liquid assets at its disposal, through which the company was able to grow into a European media giant.
It also began to pay good dividends to its shareholders.
For Aatos Erkko, this meant a new era as a user of money. He directed tens of millions to the Jane & Aatos Erkko Foundation, established in 2002, which supports high-level international research, arts and culture, and has among other things become a significant backer of projects in the field of medicine.
Erkko was also a major player in 2005 when two foundations close to Helsingin Sanomat were merged to become the Helsingin Sanomat Foundation, which exists to advance and support excellence in research as a means of guaranteeing the broad base, independence, and continuity of Finnish scientific work, particularly in the areas of communications and futures research.
It was Erkko's will that his money would be put to things that would go on giving for a long time to come.
Helsingin Sanomat / First published in print 8.5.2012
Previously in HS International Edition:
Aatos Erkko (1932-2012) (7.5.2012)
Aatos Erkko remembered in Finland and abroad (8.5.2012)
Jane & Aatos Erkko Foundation
Helsingin Sanomat Foundation
TEEMU LUUKKA / Helsingin Sanomat