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Potential new owner of Helsinki Shipyard faces second criminal probe

Russia, which owns the Arctech Helsinki Shipyard, is seeking a new owner due to US sanctions. One potential buyer is a controversial Croatian millionaire.

Danko Končar
Danko Končar is principal owner of the Finnish steel company Afarak. Image: Afarak Group
Wif Stenger

Yle has learned that the European conglomerate Kermas is in negotiations to buy the Arctech Helsinki Shipyard, which is now Russian-owned.

Last autumn, Yle reported that Finland's National Bureau of Investigation (NBI) was investigating Kermas's founder and CEO Danko Končar's suspected links to organised crime. The Croatian businessman is the principal owner and former CEO of the Helsinki-based metals company Afarak Group, formerly known as the Ruukki Group.

The NBI's preliminary investigation is still underway, so no details have been announced. The newspaper Helsingin Sanomat reports that the suspected crime is aggravated insider trading in Afarak shares.

Kermas is involved in the shipbuilding sector in Croatia. Arctech is specialised in building icebreakers, claiming to have built 60 percent of all icebreakers in operation around the world.

Efforts to circumvent sanctions

Arctech Helsinki Shipyard CEO Esko Mustamäki declined to comment to Yle regarding any possible buyout offers. He told the Lännen Media group that the shipyard's main owner, Russia's United Shipbuilding Corporation (USC), is seeking a new majority owner for the firm.

Mustamäki admits that the prospective change in ownership is an effort to get around sanctions facing the firm, which is 100 percent owned by the Russian state. President Vladimir Putin established USC by decree a decade ago.

In mid-2014, the United States imposed sanctions on the company as part of its response to the Russian annexation of the Ukrainian region of Crimea.

Murky financial holdings

The NBI has investigated Končar before. In December 2016, the Helsinki Prosecutor's Office decided not to prosecute charges of securities-related fraud. He denies any wrongdoing. Last autumn, details of Končar's complex, murky financial holdings emerged in the Panama Papers data leak, suggesting that he has sought to conceal his decision-making power within the Afarak Group.

In November, a group of Afarak shareholders called for an audit of Končar's dealings within the group and the installation of a new board independent of the secretive Croatian millionaire.

In 2015, Finnish authorities rejected an unknown Croatian firm's bid to buy into the planned Russian-built Fennovoima nuclear power plant, after determining that Migrit Solarna Energija was Russian-controlled.

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