Prison sentences from Appeal Court for former managers of Jippii
The Helsinki Court of Appeals has today [Thursday] handed down sentences for aggravated stock market violations to a number of former managers of the Internet and telecommunications service provider Jippii (currently Saunalahti).
The sentences vary between fines and a term of two years in prison.
The Court of Appeals ordered two unconditional prison sentences and a number of pecuniary penalties.
The court imposed a pecuniary penalty on four former managers of the company, while charges against two persons were dropped.
Harri Johannesdahl, who was Jippii’s CEO at the time, was sentenced to one year and ten months in prison, while Ilpo Kuokkanen, who was the full-time chairman of the board at the time, was handed a prison sentence of two years.
The convictions were given for serious offences, including accounting violations and in Johannesdahl’s case aggravated misuse of insider information.
In addition both Johannesdahl and Kuokkanen were disqualified from running a business.
Board members Arto Karila and Petteri Järvinen were convicted of giving false and deceptive information on Jippii’s stock.
The court imposed a pecuniary penalty of 60 day-fines on Karila, and 120 day-fines on Järvinen.
In addition, a severe corporate fine of EUR 200,000 was imposed on Jippii, which is currently known as Saunalahti, and is now a part of the Finnish telecommunications company Elisa.
Those who were convicted of aggravated misuse of insider information were also ordered to forfeit EUR 320,000 in illegal profits to the state.
In the case of Johannesdahl, the sum was EUR 132,000.
In the autumn of 2007, the former managers of Jippii were acquitted of all charges of stock market manipulation and insider trading at the Helsinki District Court.
In its press release, the Helsinki Court of Appeals exceptionally expresses harsh criticism against the district court ruling, saying that the ruling made at the Helsinki District Court in now way indicates the grounds for its decision.
Regardless of the procedural fault, the Court of Appeals decided to handle the case in order to avoid further delay, instead of returning it to the district court, the press release notes.
The Court of Appeals found that Kuokkanen, Johannesdahl, and two other former managers were guilty of accounting violations, as they had neglected to report and allocate the sales profit of approximately FIM 17 million (more than EUR 2 million) from their German subsidiary in Jippii’s consolidated financial statements.
In addition, the company set off FIM 15 million as expenses with respect to operations in Germany.
The Court of Appeals imposed a suspended prison sentence of eight months on the then chief auditor, as his manner of proceeding had contributed to the crime, according to the Court.
Jippii was in business under this name from 2000 to 2003, and the company is for ever associated with the IT-bubble that burst in Finland and elsewhere in the early years of the new century.
The German operations referred to were sold off in 2004.
Previously in HS International Edition:
Former management of Jippii charged with serious stock market violations (9.5.2006)
Former managers of Jippii acquitted on insider trading charges (1.11.2007)