The Helsinki District Court has found former Talvivaara Mining Company chief executive and board member Pekka Perä guilty of three counts of information crimes. The court sentenced Perä to an eight-month suspended prison sentence and a fine.
The prosecutor called for Perä to be sentenced for eight offences relating to information provided to the securities markets. However the court rejected five of the charges.
A former director of the then-privately-owned Talvivaara mine has been sentenced to a six-month suspended prison term for five counts of misuse of insider information. He was also ordered to pay a supplementary fine and to return 50,000 euros in ill-gotten gains to the state.
Another former Talvivaara CEO, Harri Natunen, was found guilty on one charge relating to an information crime and was fined for the offence. Meanwhile a former CFO was also fined for an information offence.
The sentences are not enforceable as the sentences will be appealed. Perä has declined comment on the outcome.
False or misleading information fed to markets
The cases turned on production forecasts that the company provided to the stock market. The court ruled that some of the information relating to nickel production forecasts that Talvivaara provided to the markets in 2012 and 2013 was either false or misleading. The court ruled that the information provided about the production forecasts was not realistic, nor was it likely to be realised.
From an investor’s perspective, the quantity of nickel produced is essential information that can affect the security's share price. Additionally, updated information about production volumes was delayed in one instance.
According to the court, the suspended sentence handed down to the former mine director related to his misuse of company insider information.
The company itself was ordered to pay a corporate fine of 50,000 euros. The prosecutor had previously called for a fine of 500,000 euros.
Talvivaara: No impact on company
In a release issued after the court rulings, Talvivaara Mining Company issued a statement in which it said that the judgements will not affect the company’s operations. The company also noted that the company itself was not involved in the cases.
"In Talvivaara's view, the decisions by the District Court have no effect on the Company or its financial position nor do they give any reason to reassess the position of the CEO," the company commented.
Five years ago the Kainuu District Court sentenced Perä and two other former Talvivaara directors to fines for environmental degradation.
Talvivaara Mining Company is the parent company of the once-flailing Talvivaara Sotkamo Mine located in Kainuu, eastern Finland. Government stepped in to save the bankrupt mining operation in August 2015, initially injecting more than 100 million euros to buy out the venture and renaming it Terrafame.
At the time, Talvivaara Mining Company owed creditors nearly half a billion euros, while the mining outfit was nearly one billion euros in debt. The parent company is currently in the process of restructuring its debt.