Elisa Board Member expresses disapproval of policy chosen on corporate restructuring

Lasse Kurkilahti

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The Board of Directors of the telecommunications service provider Elisa was not unanimous when rejecting the demands to amend Elisa’s corporate structure and strategy made by the company’s largest shareholder, Novator Finland, owned by the Icelandic investor Thor Björgólfsson.
      Last month, Novator called for a reshuffle on the Elisa board and for splitting the company into two separate parts. In its vision, a separate holding company would deal with international growth issues and would be responsible for major strategic decisions.
     
Elisa’s Board of Directors announced immediately that it opposes the splitting of the business, saying that the structural change of the company is not necessary and that the current corporate structure fully supports the execution of its strategy.
      ”The company’s first press release was unanimous, while the second also included some dissenting opinions. Nevertheless, the majority of board members were unanimous”, reported the Chairman of the Board, Ex-CEO of Vaisala Pekka Ketonen, on Wednesday.
      When asked, another Board Member, Kemira CEO Lasse Kurkilahti admitted that he was against the stand taken by the Board.
      Elisa’s Board of Directors has acted against the good governance practice when rejecting the proposals of the Icelandic investor Thor Björgólfsson, said Lasse Kurkilahti.
     
In Kurkilahti’s view, the Board should never start opposing the largest owner of the company, nor should it ever take a stand against its owners in general.
      The Icelandic shareholder made his proposal for the first time already last spring. If the Board of Directors had acted in time, the shareholders would have had enough time to make a decicion on the demands without convening in an extraordinary shareholders’ meeting.
     
In addition to Chairman Pekka Ketonen and Kemira CEO Lasse Kurkilahti, Elisa’s Board includes the major Marimekko owner Mika Ihamuotila, Ex-CEO of Avesta-Polarit Ossi Virolainen, attorney Matti Manner from the Brander&Manner law firm, and Risto Siilasmaa, the Chairman of the F-Secure Board.
     
Two major shareholders of Elisa, insurance companies Varma and Ilmarinen, are taking steps in order to prevent the splitting of the company. According to the Finnish Broadcasting Company (YLE) newsdesk, Varma and Ilmarinen intend to advise Elisa’s small shareholders to oppose the proposals made by Novator. The companies justify their actions by saying that Novator’s demands are not in line with good ownership policy.
      Moreover, the Central Organisation of Shareholders plans to collect powers of attorney from small shareholders who cannot make it to the meeting.


Previously in HS International Edition:
  Decision on Elisa split postponed until late January (29.11.2007)
  Icelandic shareholders hope to restructure management of telecom company Elisa (26.11.2007)

Links:
  Elisa stock exchange bulletin 28.11.2007: Elisa´s Board Announces the Rationale of Its Views Regarding Novator Finland Oy´s Proposal to the EGM on 21 January 2008
  Elisa stock exchange bulletin 28.11.2007: Invitation to Extraordinary General Meeting - New Date 21.1.2008

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