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Chancellor of Justice confirms complaints over PM Sipilä’s biotech firm ties

The office of the Chancellor of Justice has confirmed that it received four requests calling for an investigation into a possible conflict of interest relating to Prime Minister Juha Sipilä. The case turns on the PM's role in a trade mission to India during which a biotech company partly owned by his children won a high-value contract.

Juha Sipilä.
Image: Martti Kainulainen / Lehtikuva

The requests for a probe into a possible conflict of interest on the part of Prime Minister Juha Sipilä followed revelations that a biotech company known as Chempolis participated in a premier-led trade mission to India where it won a contract worth tens of millions of euros.

Under normal circumstances such a deal would be celebrated in Finland. However, the tabloid daily Iltalehti reported Tuesday that Chempolis was partly-owned by Juha Sipilä’s adult children by way of their holding company Fortel Invest, raising the question of whether the prime minister found himself in a conflict of interest situation.

Sipilä: Excluding Chempolis would have been "too harsh"

On Tuesday night Sipilä told Yle’s A-Studio that he’d played no role in Chempolis’ successful business trip to India. He added that the government’s trade promotion organisation Finpro was responsible for putting together the list of companies participating in the business delegation.

Sipilä said that when it came to his attention that Chempolis was a member of the delegation, he considered dropping the company from the group, but came to the conclusion that would be too harsh a measure.

According to the office of the Chancellor of Justice, all of the complaints were lodged by private individuals. The officials say that the complainants are likely to contact the office of the Parliamentary Ombudsman to determine whether similar complaints had been filed there.

If corresponding queries were filed with the Parliamentary Ombudsman, then the office that received the first complaint would deal with the case. The office of the Chancellor of Justice may take months to process such cases.

Parliamentary Ombudsman requests more info from PM

Meanwhile the Prime Minister has provided additional information to the Parliamentary Ombudsman, who is currently looking into another conflict of interest case involving the premier.

That one involves the PM’s role in granting an additional 100 million euros in taxpayer funds to the loss-making mining operation in eastern Finland run by Terrafame, formerly Talvivaara.

Just days after the cash injection, it was reported that Katera Steel, an engineering firm at the time partly owned by Sipilä’s children by way of Fortel Invest, had landed a half-a-million-euro deal with Terrafame. Katera Steel’s main owners are Sipilä’s uncles and cousins.

In the supplementary information sent to the Ombudsman, Sipilä said that he learned of the deal between Katera Steel and Terrafame three days after the cabinet decided on pumping more money into the ailing mining operation.

Sipilä added that he’d had no knowledge of any business ties between the two companies when he voted on the funding measure.

The Ombudsman had specifically requested more precise information about the chain of events in the case, which prompted complaints from 20 people enquiring whether Sipilä faced a conflict of interest in the financing decision.

On Tuesday, Sipilä announced via Twitter that the holding company Fortel Invest had disposed of its stake in Katera Steel. The company confirmed that it had purchased the five-percent stake in the company back from Fortel, but did not disclose the sale price.

Fresh concerns arise

On Tuesday, Yle also reported that the majority state-owned energy firm Fortum invested some six million euros to purchase 34 percent of Chempolis – a controlling share – last October, at a time when the company was in danger of going under because of its weak cash position.

At the time Sipilä was – and still is – the minister responsible for the government’s ownership steering programme, which manages the country’s state-owned assets.

Chempolis has developed a process for refining biofuels, but the technology has yet to be commercially proven.

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