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Steel executives accused of hiding assets before bankruptcy

Dutch and Finnish board members of a steel company face trial over financial irregularities of 35 million euros. The losses were discovered after the firm abruptly closed two factories on the south-west coast. About 400 people lost their jobs.

FNsteelin tehdas Kemiönsaarella.
This FNsteel plant in Dalsbruk shut down nearly five years ago. Image: Yle

Two Dutchmen and one Finn will go on trial next autumn in one of Finland's biggest white-collar criminal cases in recent decades. The main trial will begin at the District Court of South-West Finland on October 10.

The former board members of FNsteel are accused of concealing some 35 million euros' worth of assets before the company declared bankruptcy in mid-2012.

At that point the Dutch-owned company shut its steel mills at Koverhar in the south-western municipality of Hanko and at Dalsbruk in nearby Kimitoön. Altogether nearly 400 lost their jobs in the economically-struggling area.

Another factory in the area owned by a subsidiary, FNsteel Dalwire in Dalsbruk, is also expected to close soon. It launched redundancy talks in late April.

Prosecutors allege that over a period of 10 months, management transferred products from the Finnish facilities to other subsidiaries of the company for no perceptible business reason and without recompense.

They say the aim was to move assets out of reach of Finnish creditors before announcing the bankruptcy, which came as a complete surprise to employees and local authorities.

The defendants deny any wrongdoing.

FNsteel, which makes wire rod and PC strand, also has plants in Sweden and the Netherlands.

"A very unique case"

District Prosecutor Petri Hiltunen says the defendants have been cooperative, coming to Turku for interrogations.

"I've never been involved in such a large case," says Hiltunen, who specialises in financial crimes. "This is a very unique case," he adds.

The three face charges of aggravated fraud and aggravated dishonesty by a debtor. The latter charge is related to products worth 19.5 million euros that were handed over to other subsidiaries within the FNsteel group. At that point the Finnish company was already in debt to the parent company. The charges of aggravated fraud are related to some 15 million euros worth of irregularities.

Hiltunen has reserved seven days for hearings as there are thousands of pages of evidence, 15 witnesses to be called, with all the proceedings to be interpreted into and from Dutch.

Suspicions of foul play were immediately aroused by an investigation did not begin until 2015. Originally two Finns were under investigation, but the case against one of them was dropped.

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