NEW YORK-Responding to a crescendo of allegations of improper inside dealing related to Sonera’s
November initial public offering, the board of directors of the Finnish telecommunications carrier last week fired its
chief executive, Pekka Vennamo.
Later the same day, Patti Aura, Finland’s Minister of Transport and
Communication, resigned because, he said, “I was mistaken about Pekka Vennamo, head of
Sonera.”
The Sonera board appointed Aulis Salin, formerly a managing director of Telecom Finland, to
succeed Vennamo as chief executive. At press time, no replacement for Aura had been appointed.
“Vennamo
supplied wrong information to me,” Aura said.
“Specifically, he concealed the fact that he was
purchasing shares (of the IPO) for his family.”
In the largest stock sale in its history, Finland partially
privatized Sonera, formerly called Telecom Finland, by selling about 20 percent of the carrier for more than $1.4
billion in November.
The global offering was oversubscribed by a factor of at least 20-times. Consequently, most
retail investors were allowed to buy, on average, 820 shares each, or 10 percent of average individual
demand.
Vennamo, on the other hand, confirmed in late December that he received 22,000 shares individually as a
company executive plus another 25,000 shares through a private investment company he owns.
He also admitted he
failed to disclose that he had transferred 5,300 of those shares to his daughter in mid-December in violation of an
understanding with the federal government that he would retain his entire stake in the company.
“I don’t think
I have done anything wrong,” Vennamo said.
“Of course, if I’m dismissed, I must accept
that.”
Marrku Talonen, chairman of Sonera, said the board dismissed Vennamo because of concerns the
public debate over his share purchases and sales would be harmful to the company. However, Talonen said there is no
evidence that Vennamo did anything improper.
Sonera’s stock price has doubled since its market debut. This rapid
price rise has prompted criticism from the opposition Finland Centre political party that the federal government sold the
IPO too cheaply.
Yuri Romantsov, a Helsinki-based reporter for ITAR-TASS News Agency, speculated that
Finland Centre began the “scandal over the privatization of Sonera … before the New Year holidays … most
probably … in view of the parliamentary elections scheduled for … March.”
