Nokia board learned of Kallasvuo’s tax evasion conviction from media

Ollila: Nokia does not comment on internal processes

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Most of the members of the Board of Directors of Nokia did not learn about the tax evasion conviction of the company’s new President and COO Olli-Pekka Kallasvuo until the matter had been made public recently in Helsingin Sanomat and elsewhere.
      Nokia has repeatedly stipulated that Kallasvuo informed Nokia about the matter in September 2004 when he had imported an excessive amount of tax-free goods from a trip to Switzerland.
      Nokia’s Chairman and CEO Jorma Ollila said at a press conference in late January that Kallasvuo had "brought the course of events to the attention of Nokia in a very appropriate manner".
      Kallasvuo had taken EUR 11,000 worth of goods acquired in Switzerland through customs at Helsinki-Vantaa Airport without declaring them. He was fined more than EUR 31,000. Kallasvuo did not contest the charges, and there was no court appearance.
     
The matter came to the attention of Nokia, but Helsingin Sanomat has learned that not all outside members of the company’s Board were informed, even in the summer of 2005 when Kallasvuo was named the company’s future top executive.
      Jorma Ollila, who is also responsible for the operative management of the company, is the Chairman of the Board. The vice chairman is Paul J. Collins.
      The board includes four Finish members, Georg Ehrnrooth, Bengt Holmström, Vesa Vainio, and Arne Wessberg.
      The foreign members of the Board are Daniel Hesse, Per Karlsson, Edouard Michelin, and Marjorie Scardino.
      Jorma Ollila says that Nokia will not comment on how the information of the case was reported to the various people, because the company does not disclose its internal processes to outsiders.
      Ollila reiterated that the matter has been handled properly both on the part of Kallasvuo and Nokia.
     
Helsingin Sanomat broke the story about Kallasvuo’s petty tax fraud and his fine on Saturday, January 21st.
      The story was picked up by the Financial Times the following Monday.
      Helsingin Sanomat has learned that Nokia’s foreign board members were surprised by the expression used by the FT, according to which the case was "settled out of court".
      The expression was the newspaper’s way of expressing the Finnish practice, under which relatively minor violations that are not contested are settled by paying a fine, without an official court hearing, allowing the matter to be kept out of the public eye.


Previously in HS International Edition:
  Nokias Ollila backs successor Kallasvuo despite tax fraud conviction (27.1.2006)
  Nokia executive Olli-Pekka Kallasvuo pays massive fine for minor tax fraud (23.1.2006)

Helsingin Sanomat