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Finns Party MP’s firm gets full 100k grant from Business Finland

The scheme is intended to help companies affected by the coronavirus crisis, but the state agency's criteria has been questioned.

Tom Packalén
The artificial intelligence company founded by Finns Party MP Tom Packalén received a special coronavirus grant from Business Finland. Image: Jarno Kuusinen / AOP

A company founded by Finns Party MP Tom Packalén received a grant from Business Finland under a special coronavirus business support scheme which has come under intense scrutiny in recent days.

IT firm Utopia Analytics received the maximum grant of 100,000 euros.

The grants are officially to provide support for companies affected by the coronavirus pandemic. The money should be used to develop new business opportunities during the crisis.

Utopia Analytics is comprised of "text analytics, artificial intelligence and software development experts", according to the company’s own website. The firm sells software to help moderate online discussion forums, among other purposes.

According to Packalén’s own declaration of interest (in Finnish), he was one of the founders of Utopia Analytics and is still the chairman of the board with a 38 percent stake in the company. He also receives a salary from the firm.

Yle asked Packalén a number of times to comment on the funding received by Utopia Analytics, but he repeatedly directed questions to the company’s communications director.

"I do not participate in operational activities. As chairman of the Board, I had been aware that the aid was applied for and obtained," Packalén finally informed Yle, adding that he believes the distribution of subsidies must be thoroughly investigated.

Unprofitable company has previously received state support

Janne Huuskonen, Communications Director at Utopia Analytics, told Yle that due to the coronavirus pandemic, major changes have had to be made to the company's international sales and marketing in a very short time.

"Because there are no trade fairs, for example, our traditionally efficient sales channels are blocked. The financial situation of some of our customers has also changed, which impacts on us," Huuskonen said.

According to the company’s 2018 financial statements, Utopia Analytics' net sales were approximately 388,000 euros and the company made a loss that year of about 124,000 euros. Last year's financial statements are still under review, but according to Huuskonen the company did not make a profit.

The company currently has about 20 employees in Finland.

The firm has received state support in the past. In 2017, Business Finland’s predecessor Tekes supported the company’s internationalisation with a grant of 1.2 million euros alongside a private equity investor.

Criticism of grants from all sides

The Business Finland coronavirus grants have come under scrutiny and criticism in recent days, with questions raised about grants going to businesses that may not need them.

Minister of Economic Affairs Mika Lintilä announced on Tuesday that his ministry’s internal audit team will investigate the distribution of the subsidies.

In a blog post (in Finnish), Packalén's Finns Party party colleague Jari Ronkainen questioned Business Finland’s decision to grant subsidies to social media companies.

"However, I do not understand why 100,000 euros of emergency aid should be paid to social media companies, which one would think now have enough users during quarantine and periods of restriction," Ronkainen wrote.

Based on the information currently available, Packalén is the first member of Finland’s parliament to be involved with a company that received the full grant from Business Finland.

Smaller grant amounts have also been paid to a company partly owned by the husband of the Green Party’s Minister of the Environment Krista Mikkonen, and to a company where the husband of Prime Minister Sanna Marin is an employee.

Helsingin Sanomat reported on Tuesday that the company of another Finns Party MP, Ano Turtiainen, received a special coronavirus grant of 70,800 euros from the Centre for Economic Development, Transport and the Environment.

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