The prosecutor's office is looking at information arising from a report by business daily Ärpäev, which points to a possible conflict of interest case involving a sitting MP and former head of state lottery Eesti Loto, and a businessman who allegedly gave a loan of close to €300,000 and whose real estate development ended up with Eesti Loto as its main tenant.
MP Heiki Kranich (Reform), who used to head up Eesti Loto, received a loan of €280,000 from a businessman whose development on Hallivanamehe street in Tallinn ended up with the state lottery as its key tenant, ERR's online news in Estonian reports, citing the Äripäev piece.
The implication is that the loan helped facilitate the Eesti Loto relocation, which took place in 2015, while Kranich still headed it up. The enterprise had previously been located on nearby Pärnu maantee.
The allegations have attracted the attention of the prosecutor's office, the finance minister, the State Audit Office and the Riigikogu's anti-corruption committee.
Kranich sat on the VII (1992-1995) and VIII (1995-1999) Riigikogu, as well as being elected to the XIV (current) Riigikogu. He became Eesti Loto head in 2009, stepping down in summer 2018 when he was replaced by Riina Roosipuu.
Should there be clear indications of an offense, criminal proceedings are likely to follow, ERR's online news in Estonian reports.
Äripäev: Developer told Kranich about development while he was still Eesti Loto chief, later granted €280,000 loan
Äripäev said that (link in Estonian) real estate developers EKE Invest financed the new development on Hallivanamehe Street, whose key tenant is Eesti Lotto. Businessman Koit Uus, connected with EKE Invest, told Kranich about the development being completed in 2015, and granted the loan of €280,000 to Kranich after that, Ärpiäev said.
Prosecutor's office not decided on criminal proceedings yet
Spokesperson for the prosecutor's office Olja Kivistik told ERR on Tuesday that they had not yet decided on whether to initiate criminal proceedings.
"So far, according to data published in the press, no criminal proceedings have been initiated," said Olja Kivistik of the state prosecutor's office.
"The Prosecutor's Office will check the information and if unequivocal evidence of any crime should appear, criminal proceedings will be initiated," Kivistik added.
Finance minister: Plan to meet Eesti Loto board
Finance minister Martin Helme (EKRE) has not yet decided whether the case needs any scrutiny.
"I plan to meet with the Eesti Loto AS management board to get an overview of building rental details for the state-owned company," Helme said, adding that a decision could be made after that.
Eesti Loto falls under the finance ministry's remit.
Riigikogu corruption committee head: Kranich to appear before committee in late January
Katri Raik (SDE), Riigikogu corruption committee chair, said the case was of public interest, noting that Kranich may have sought the loan due to financial problems and saying the committee would review Kranich's declaration of interests, required for all MPs.
"We are interested in whether the individual has declared everything correctly and is able to fulfill his obligations," Raik said.
"This means it could be the case that he has been influenced by third parties, that he can't do his job honestly, but has so much debt that he has to turn to someone due to these issues."
Raik added that Kranich's declaration of interests will be reviewed going back to 2009, when he became head of Eesti Loto. The committee has also asked to see loan and surety agreements and any changes to these, to get a clear picture of how any debts the MP has may have developed.
"There are two sets of documents that are expected to reach us in the coming days which are of particular interest to the commission right now," she said, adding that Kranich will certainly be appearing before the committee in late January.
Raik added that the committee could also appeal to law enforcement agencies, but it must first be clear that there is cause to do so.
Auditor General: Director of a state-owned company should not be in this situation
State Audit Office Auditor General Janar Holm said, the head of a state-owned company should avoid situations where such overlaps of interest could happen. He could not speculate further on the specific case, as the State Audit Office had not examined any of the documents yet.
"I would confine things to the fact that it is not reasonable for the head of a state-owned company to end up in this type of situation, whatever it may seem. [However] What really happened is the work of the Riigikogu committee," Holm said.
Kranich: I may take Äripäev to court
Heiki Kranich denies any wrong-doing, saying that the Eesti Loto lease contract had been concluded a long time ago, and followed a competition involving state-owned real estate developer Riigi Kinnisvara AS.
"The decision on who to enter into the lease agreement with was made by the Estonian Loto board; Äripäev has covered the facts entirely arbitrarily. I will certainly approach the press board about Äripäev's activities, and do not rule out going to court," he added.
Kranich also did not deny having any loan obligations, and said he had also declared these, saying that a loan he had guaranteed himself was the subject of possible bankruptcy proceedings.
"I have guaranteed a loan to a private company. This private company has not been in the best shape with my business partner lately and therefore there is a risk that these guarantees may come to fruition. All of this is currently being settled via a bankruptcy process - there is also a civil lawsuit against another company for malicious takeovers, and I do not rule out that such actions will come. So my hope is that this bankruptcy process will win back the [loan guarantee] money, " he said.
Editor: Andrew Whyte