Finnish FSA: Report filed with police over spring 2002 Partek deal

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The Finnish Financial Supervision Authority (FIN-FSA) confirmed through its Monday announcement that a report has been filed with the police with regard to the spring 2002 merger of Kone and Partek.
      The report of a possible criminal offence centres on the trading in Partek stock that took place before Kone made public its Partek takeover bid in May 2002.
      Yesterday Helsingin Sanomat reported that the Helsinki Criminal Police are looking into the activities of Antti Herlin, CEO of Kone, and Tapio Hakakari, secretary of the company's Board of Directors, before the merger of Kone and Partek in 2002. Both men are suspected of misusing insider information in their dealings with Partek shares. The number of suspects could grow.
      The suspicion of misuse of insider information arises from the fact that Herlin and Hakakari bought Partek stock worth millions of euros for the portfolio of the Herlin family company Security Trading. The purchases were made before Kone published its offer to buy out Partek. The announcement was followed by a sharp rise in the Partek share price.
      The family company made a sales profit of about EUR 1.5 million in the deal.
     
In its unique announcement the FIN-FSA wanted to set right Hakakari's comments published in yesterday's Helsingin Sanomat. According to Hakakari, who is also the managing director of Security Trading, the FIN-FSA had cleared Kone of all suspicion over the Partek deal, and that there was no need for any further action.
      The FIN-FSA verifies that Kone has been cleared of suspicion but in respect of a totally different matter.
      In 2002 the FIN-FSA looked into an accusation by the then Partek CEO Christoffer Taxell, according to which a representative of the State had misused insider information in an effort to aid Kone to prepare its Partek bid.
      Taxell presented the Chancellor of Justice with his suspicions that a ministry official, who was aware of ongoing merger negotiations between Partek and Wärtsilä, had passed this information to Kone representatives. This in turn helped Kone to make its bid at the right time for the right amount of money.
      The FIN-FSA's conclusion of this investigation was that no wrongdoing had taken place. All the involved parties were notified that there was no need for further action.
     
The Kone takeover bid, in turn, led to other enquiries, which culminated in the request for investigation by the police in June 2003.
      In their Monday announcement, Herlin and Hakakari said that the preliminary investigation request "apparently" related to the stock purchase by Security Trading just before the Partek takeover bid by Kone.
      "We deny any allegation of misuse of insider information and support the investigating officials in clarifying the matter", stated the Security Trading communiqué, signed by Hakakari and Herlin.


Previously in HS International Edition:
  Police suspect Kone CEO of insider trading with Partek stock (23.5.2005)

Links:
  The FIN-FSA

Helsingin Sanomat