Municipal pension boss obscured business contacts with Nova Group
“No cash flow from KEVA to Nova”, Kauppinen told board
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Markku Kauppinen, CEO of the Local Government Pensions Institution (KEVA) has told the KEVA board that municipal pension money has never been paid to the Nova Group, a real estate service company that is now in Bankruptcy. Nova Group’s role in helping finance the Parliamentary election campaign of the Centre Party in 2007 has been the focus of extensive media attention recently.
According to a report by Kauppinen to the members of the board of KEVA, there has “never been cash flow between KEVA and Nova Group.”
Kauppinen gave his report at a meeting of the board on Wednesday evening, when his presence at a meeting on helping fund the Centre Party’s election campaign had been revealed.
In December 2007 Kauppinen proposed at a meeting of the KEVA board that KEVA should approve a deal worth EUR 20 million involving the purchase of a snowmobile factory that was being set up in Rovaniemi from Nova Kiinteistökehitys, a real estate development company that was a part of Nova Group.
The minutes of last week’s meeting indicate that Kauppinen sought repeatedly to take a distance to the companies that form the Nova group.
Kauppinen described the snowmobile factory in Rovaniemi as the Bombardier snowmobile factory, and said that KEVA had not commissioned Nova Kiinteistökehitys for the project.
Sources taking part in the KEVA board meeting told Helsingin Sanomat after the meeting on Wednesday that Kauppinen’s briefing left the impression that KEVA and Nova did not have any practical dealings with each other.
KEVA also issued a press release on Thursday, denying any transfer of funds bewteen Nova and the pension company.
In reality, Nova was active toward KEVA, and the KEVA management was active when the Nova contract was signed, and when construction of the factory was taking place.
Bombardier is a company involved in the snowmobile factory, which pays rent to KEVA for the premises. KEVA was an investor-owner in the project, and ultimately financed the whole project.
Initially, Nova was the active party. In July 2007 it asked KEVA for a “non-binding” offer for the new premises for the snowmobile factory.
In October 2007 KEVA’s investment directors indicated willingness to invest EUR 20 million in the factory.
In November 2007 Nova Kiinteistökehityssaid that it would accept the KEVA offer.
The KEVA management indicated to Nova that it was ready to negotiate on the acquisition of old production premises as targets of investment, if the rental revenue equivalent to that of a new factory could be achieved.
Apparently Nova never responded to the interest shown by KEVA for another Rovaniemi property.
The final decision on the financing of a snowmobile factory built with pension money came in December 2007, when Kauppinen proposed to the KEVA board that the property and premises should be bought for EUR 20 million.
When the snowmobile factory was in its final stages late last year, the real estate company overseeing the project was moved from the ownership of Nova to that of the builder, Oka, for a few months in late 2008.
Keva paid the sum that was originally agreed upon with Nova - more than EUR 20 million - to Oka in December last year.
Kauppinen’s report on cash transfers was therefore technically accurate; the money did not go directly from KEVA to Nova, as the builder Oka was in between, but initially, and finally, the financing of the snowmobile factory came from the Local Government Pensions Institution (KEVA).
More on this subject:
 PM hosted second meeting of Centre Party backers in 2007
Previously in HS International Edition:
Millions in municipal pension funds invested in Nova Group project (19.6.2009)
BREAKING NEWS: Bankruptcy Ombudsman orders special audit of Nova Group (19.6.2009)
Helsingin Sanomat
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