Enterprise Estonia may demand up to €171,000 from Ermamaa

Ärma Farm in Viljandi County has belonged to the Ilves family for generations. (Urmas Luik/Pärnu Postimees/Scanpix)
11/4/2016 1:45 PM
Category: Business

If the European Commission should agree with the Ministry of Finance’s audit and find that the grant paid to Toomas Hendrik Ilves’ company Ermamaa was never put to its intended use, Enteprise Estonia was ready to pay back the money to the commission out of its reserves, and then consider to demand funds back from Ermamaa as well, CEO Hanno Tomberg said on Thursday.

As the money Ermamaa received has not been used to build and operate a tourism farm for the amount of time set out in the grant’s conditions, the European Commission might demand that the money be paid back by Enterprise Estonia.

Tomberg: Enterprise Estonia to demand back more money from Ilves if European Commission finds funds were not put to intended use

In case such a demand should come, Enterprise Estonia was ready to pay up to €171,000 euros out of its reserves, and it would then see if it could get the same amount back from Ilves’ company, CEO Hanno Tomberg said on Thursday.

Enterprise Estonia has three months to start the according proceedings, but Tomberg promised they would take care of the matter sooner than that.

Meanwhile, Erki Mölder, chairman of Enterprise Estonia’s supervisory board, said that the board had come to the conclusion that the beginnings of the problem were to be found in the year 2012, when the process surrounding the changing of grant terms hadn’t been sufficiently documented. “The biggest allegation is that the decision in 2012 was extraordinarily generous to the applicant [Ermamaa].”

Mölder: 2012 decision difficult to change now

Mölder also explained that today’s management had very few options to change the 2012 decision. “It isn’t possible to change this by just adjusting the percentage of what’s demanded back. An alternative would be to start a completely new reclaiming procedure, and based on the Finance Ministry’s audit, this very likely will be done.”

An audit by the Ministry of Finance published on Wednesday suggested that the €190,000 grant former president Toomas Hendrik Ilves’ company received had never been put to its intended use, as Ermamaa hadn’t operated Ärma Farm as a tourist farm for more than half a year. The conditions of the grant paid out in 2006 and 2007 specified that Ermamaa would have had to run a tourism farm for at least 60 months.

Former Enterprise Estonia CEO: 2012 decision included review set for 2016

Maria Alajõe, who ran Enterprise Estonia when Ermamaa was granted more favorable conditions in 2012, said that back then, the decision included a review of the percentage of what the company was to pay back, set for 2016.

Granting OÜ Ermamaa, back then owned and run by Toomas Hendrik Ilves’ ex-wife, Evelin Ilves, better conditions in case it would announce in 2016 that it didn’t intend to run Ärma as a tourism farm had been a lengthy procedure, Alajõe told ERR on Thursday. Lawyers and “different people involved in the project” had discussed the matter for months after Toomas Hendrik Ilves had been elected for a second term in office. 

Ermamaa requested twice that the project be suspended, as Toomas Hendrik Ilves’ being president made running Ärma Farm as a tourism business impossible. The requests were granted.

The Finance Ministry’s audit pointed out that Ermamaa had run Ärma Farm as a toursim business for just six of the 60 months demanded in the grant’s terms. But in 2012, Enterprise Estonia counted Ermamaa’s services hosting guests of state, paid for by the Office of the President, as a tourism activity, and added those years to Ermamaa’s record and in its favor when assessing if the grant’s terms had been met.

Asked how the terms could have been met by Ermamaa running a tourism business in Ärma at a time when Enterprise Estonia had officially suspended the project, Alajõe’s response remained somewhat vague:

“In 2012 we weighed and assessed the decision month by month. This was a difficult decision, and I believe that at that time we made the legally correct decision, and we left the possibility in the same decision to review again the amount demanded back. This is what we can say today, how we assessed and considered [the issue]. We found that the decision needed to be reviewed in 2016.”

Alajõe didn’t want to comment anything further. Former president Toomas Hendrik Ilves has declined to comment on the matter.

Editor: Dario Cavegn

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