The management of Enterprise Estonia decided on Tuesday to declare 90 percent of a grant ineligible given in 2006 to OÜ Ermamaa, a company owned by former president Toomas Hendrik Ilves. The amount of the grant will have to be paid back to the European Commission, as it originally came out of European Union structural funds.
Ermamaa planned to build the Ilves family farm into a tourism farm. At the time the grant was approved, the company was owned by Ilves’ then-wife, Evelin Ilves. After he was elected president the same year, the original business plan proved to be impossible to put into practice.
The couple later divorced, and Toomas Hendrik Ilves has since been the company’s owner. As the former president explained, after his second term ended he had no intention to continue with his ex-wife’s project. Following a decision by Enterprise Estonia to only ask Ilves to pay back 10 percent of the original grant of €190,392.80, audits and analyses of Ermamaa’s project were commissioned.
A decision by the management of Enterprise Estonia made in 2012 demanded that only 10 percent of the grant be paid back once Ilves’ second term in office ended. The fund’s current management conceded that mistakes were made, for example that after Ilves left office last year, Enterprise Estonia could have canceled the 2012 decision and instead done a more thorough analysis.
Sille Talvet-Unt, Enterprise Estonia’s CEO, argued on Tuesday that the situation was extraordinary, as in this case project the fund had supported could not have been put into practice because one of its owners was elected president.
Taxpayer to foot €152,000 bill
Enterprise Estonia announced last October that it had submitted a right of recourse totaling €19,039 to Ermamaa OÜ following the receipt of a statement from shareholder Toomas Hendrik Ilves that the firm would not continue with the intended use of Ärma Farm, the development for which the company had accepted support in 2006, preceding Ilves’ election as President of Estonia. Within days of leaving office at the end of his second term, Ilves paid back ten percent of the €190,392.80 originally granted to Ermamaa.
In submitting its right of recourse, Enterprise Estonia based its right of recourse on a March 30, 2012 decision by the board of directors in which the foundation would request only a partial reimbursement should Ilves not continue running Ärma Farm as a tourist farm following his term of office as prescribed in the conditions for support.
As the original money came from European Union structural funds, funding in the amount of the grant needs to be paid back to the European Commission. As Enterprise Estonia is the local state agency that allocates this kind of funding, the Estonian taxpayer will have to foot the bill, which is expected to amount to some €152,000.
As for the option of Enterprise Estonia making further demands to Ermamaa, the management announced that due to lack of sufficient legal grounds they would not be making any.
Editor: Editor: Dario Cavegn