Police to investigate massive suspected insider trading case in TJ Group

Authorities apply for confiscation of tens of millions in profits

Jyrki Salminen

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Helsinki Criminal Police suspect Tuomo Tilman, the Chairman of the Board of the IT services company TJ Group, and board member and CEO Jyrki Salminen of violating insider trading legislation. The allegations concern a share issue and stock trading in 2000.
      Salminen and Tilman, together with four others, were charged on Thursday with crimes related to the dissemination of information in connection with the same deals.
      Police have applied for an order to confiscate Tilman's and Salminen's assets to the tune of tens of millions of euros. Prosecutors are also demanding that TJ Group be ordered to forfeit EUR 40 million that they say the company accrued from the illegal activities.
     
"The police are calling for the confiscation of nearly all of the money earned in the sale of shares", Salminen lamented on Thursday. If they are found guilty in court, Salminen and Tilman could lose much of the EUR 130 million that they earned in the sale of the company's stock.
      The sell-off in the spring of 2000 was the largest in Finnish stock market history so far. At that time investors were in the grip of a global Internet stock feeding-frenzy.
      The investigation into the insider trading allegations is expected to be completed soon. All suspects deny involvement in any illegal activities.
     
Officials suspect that in the share issue of 2000, TJ Group failed to submit the information required by Finnish securities law.
      In its February 2000 public share offering, in which it became listed on the Helsinki Stock Exchange, TJ Group collected investments of more than FIM 1.4 billion, or EUR 237 million.
      Most of the money went to Salminen, who was CEO at the time, and to the Chairman of the Board, Tuomo Tilman. They sold their shares at a moment that happened to be a high point in the company's history on the stock exchange.
      The group's shares were boosted by the company's "strategy of stronger growth", which was made public in late January 2000, just before the share issue.
     
After the sale of shares, the result and share price of TJ Group began to decline rapidly. The company reported losses of more than EUR 1 million in the fiscal period that ended in late March of that year.
      Salminen criticised the police action as "oversized and biased".
      Also facing charges involving inadequate dissemination of information is former banker Kaj Karttunen, who was the CEO of Evli Corporate Finance, the main organiser of the TJ Group share issue.
      Prosecutors are calling for a fine of EUR 100,000 to be filed against Evli Bank. The bank's CEO Henrik Andersin dismissed the demand as unreasonable.


Links:
  TJ Group press release: TJ Group's suspected security markets information offence in 2000 to be tried in court

Helsingin Sanomat