Interview: Äripäev corruption charges fiction, says former Eesti Loto head

Heiki Kranich (right) on Wednesday's
Heiki Kranich (right) on Wednesday's "Otse uudistemajast" broadcast on Wednesday. Source: Siim Lõvi/ERR

Reform Party MP Heiki Kranich says a report by business daily Äripäev linking him to alleged corruption activities while he was head of state-owned lottery Eesti Loto is pure fiction.

As reported on ERR News, the article said Kranich, who headed up Eesti Loto 2009-2018, received a loan of €280,000 from a businessman whose development at Hallivanamehe 4 in Tallinn ended up with the state lottery as its key tenant, with the implication being the loan helped facilitate the lottery's relocation, which took place in 2015, while Kranich was still in charge.

A separate but related case involves bankruptcy following what Kranich says was his being let down by a former business partner.

The case is being investigated by the prosecutor's office; the State Audit Office is also looking at the situation since the alleged activity took place while Kranich was head of a state company.

"I really like the fact that the prosecution is investigating this, since often with such cases involving a newspaper article being referred to the prosecution results in the prosecution not taking action, saying it is a civil dispute, and something the prosecutor's office does not have time for," Kranich told ERR's Toomas Sildam, whose questions follow in bold, on Wednesday morning's "Otse uudistemajast" politics discussion broadcast.

"I hope that now, in this particular case – involving as it does a particular bankruptcy case – when an application is made to the prosecutor's office, the prosecution will treat [the bankruptcy case] as seriously and take it into consideration," he added.

At the moment, the public assuming that you, as the head of Eesti Loto, offered an entrepreneur the opportunity to benefit from Eesti Loto's tenancy, and the same entrepreneur gave you a sizeable loan.

"Eesti Loto approached [state real estate organization] Riigi Kinnisvara AS for help in finding a new rental space as early as 2012. How did Riigi Kinnisvara respond – what was its suggestion as to which real estate company to use?" 

"The same real estate company [suggested by Riigi Kinnisvara] was used by Eesti Loto in 2013. In spring, Eesti Loto's board reached a decision that what was then called the Age Plaza (the original name of what is now the Hallivanamehe 4 building-ed.) was the best possible location at the time. 

A year passed, after this decision had been made. And then Hallivana OÜ was formed, which also comprised EKE (EKE Invest, the developer of the Hallivanamehe property Eesti Loto moved to- ed.), with the participation of Koit Uus (a businessman the Äripäev report said had tipped off Kranich on the Hallivanamehe street property's near completion, and who issued the €280,000 loan to Kranich.ed.). 

"Why, then, a year after a decision, should someone have to pay a bribe of €280,000?" Kranich said.

Maybe you were so forward-thinking, that you talked to Koit Uus ahead of the opportunity?

"If I had such foresight in dealings with my wife, life would surely be a lot more fun."

But it looks bad or at least questionable, wouldn't you agree?

"The issue as presented is designed to be questionable and, in my opinion, a year later, the company that was recognized as the best bidder by the decision of the Estonian Loto Council changes ownership – so what?" 

"EKE Invest has bought up half of Tallinn. Of course, a development that has entered into a contract with a trusted tenant like Eesti Loto certainly looks mouth-watering. And I'm sure EKE wasn't the only entity trying to get some kind of stake there."

Is Janar Holm, the Auditor General, wrong when he says that it is certainly not good for the head of a state-owned company to even appear to be in such a situation?

"If one newspaper takes an action like that where it, prior to writing an article, starts looking for some kind of justification, then anything is possible, but it is not the media."

Are you talking about Äripäev?

"I'm talking about Äripäev. By the way they had a very interesting opinion article about [businessman] Oliver Kruuda's companies saying that if someone feels the need to cheat on their business partner, lawyers and judges will help them."

"Äripäev seems to have followed its own advice in creating a situation in which it has actually taken on my mantle as a business partner at the time, then generates claims, and I can quite clearly see this earlier position of Äripäev playing out."

"If you want to cheat on your business partner, the judges can help you. Lawyers can help you, but Äripäev is sure to help out."

But Äripäev have been talking to you for so long - they've published two of your interviews. You have had the floor, and been able to put forward all your arguments.

"Yes, but those arguments are not reaching the columns of the page, because Äripäev has constructed a complete fiction that harms me, harms Koit Uus, harms EKE Invest as a respectable company."

"It damages the former owners of Age Plaza, it damages Eesti Loto. This makes them all unreliable, and Äripäev is just thirsty and malicious in this case."

According to your declaration of financial interests as a member of the Riigikogu, Uuemõisa Invest AS has provided you with approximately €400,000 in loans or surety agreements.

"Actually it was €280,000 (see above-ed.). The contract was with me, but the money went directly to the company [which is now under bankruptcy proceedings-ed.]. The name of the company at that time was TFA, which as of today has been sent to the so-called corporate funeral home and, to make things as ridiculous as possible, its name has been virtually laid to rest."

"In short, it's like the tradition of the dead, that such a strangely named company goes bankrupt, then causes emotional discomfort. But I won't step back."

Why did Koit Uus give you that loan, back then?

"We've had projects with Koit in the past, which I have honored - Koit Uus just knew from past experience that I could be trusted."

So it was simply the investment which failed?

"Yes, it can now be put in those terms, though I would put it differently - that my business partner at the time, who was a majority shareholder, simply cheated on me."

How do you intend to clear your responsibilities to Koit Uus?

"I believe that in this bankruptcy process we will be able to win some things back and I will certainly not owe Koit Uus then. My real estate has mortgages from Koit Uus today, so if I don't pay up, that real estate would go on sale."

Did you also submit your declarations of financial interests to the Ministry of Finance as the head of Eesti Loto in 2009-2018?

"Initially, I submitted them, but then the Anti-Corruption Act was amended and the Finance Minister was left to decide whether or not to submit a declaration of financial interests." 

"In recent years, I had not submitted one, due to this Ministry of Finance decision. But 2009 I definitely did, 2010 I certainly did. What year this change in law was made, I don't know exactly."

This change was made in 2013.

"Until then, all my declarations had been submitted to the Ministry of Finance, then."

The Riigikogu's anti-corruption committee also wants to discuss the whole story. If the commission asks for all your loan and surety agreements, will you put them on the table?

"I have been wanting to go to the committee since the end of last year, when this issue had not even arisen. The committee has so far not found the time to hear me. Of course I will go before the committee."

And you put lay out all the contracts?

"I will describe what has happened. Along the same lines I just told you, today, I will go before the anti-corruption commission and, for crying out loud, the prosecutor's office, wherever I'm needed. It is clear from the documentation that there is no corruption nor any possibility of such." 

"So at Äripäev, it's simply straightforward fancy, just to get a cool article."

Once again, that would be clear. Are you sure you did not make any decisions as head of Eesti Loto where the interests of your company and you personally might have overlapped?

"Absolutely certain [of that]."

Do the Reform party and the Riigikogu grouping support you in this situation?

"I have suggested to the Reform Riigikogu group that I can account for the accusation that has been made in Äripäev. But people are, like, shaking hands and saying they trust me and they believe I have never done anything like that. They have known me for a long time, they know that this type of thing would not happen with me."

I noticed that on Tuesday, Kaja Kallas, chair of the Reform Party, said she would not comment on your case.

"But what is there to comment on? It is complete nonsense."

A party chair might say, 'I believe in my people'? 

"I believe that Kaja believes that I am very good at defending myself and that I do not need any outside help." 

Kranich also touched on the meaning of liberalism as a term in the present day, saying efforts had been made to besmirch the name in Estonia in recent years, and hit out at the Isamaa-sponsored bill to make voluntary pension contributions (the so-called "second pillar") voluntary as "stupidity cubed," and far from a liberal act. 

Kranich, 58, was a co-founder of Reform's forerunner party in the late 1980s, and sat as an MP on the VII (1992-1995) and VIII (1995-1999) Riigikogu compositions, as well as being elected to the XIV (current) Riigikogu in March. He became Eesti Loto head in 2009, stepping down in summer 2018 when he was replaced by Riina Roosipuu. 

The original "Otse uudistemajast" broadcast (in Estonian) is here.

Download the ERR News app for Android and iOS now and never miss an update!

Editor: Andrew Whyte

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: