Siem's decision to initiate an inspection into Eesti Post's management decisions over the last two years was unexpected for the active council of the company, they say. Ansi Arumeel, board chair of Eesti Post, refused to comment on the inspection since the board has not yet had time to discuss it, however.

Minister Siem said the decision to initiate an inspection followed a meeting with the board council last week. Listening to the council's overview of the company's situation, he concluded the decisions of management were not in compliance with the shareholders' views on the company.

Siem said: "I can not say if there is a problem, that is why the special inspection has been initiated. Special inspections are meant to map out existing problems and how to react going forward."

In June, Siem replaced the supervisory board at Eesti Post. He has not commented on whether there are any complaints about the management's actions currently.

Siem added: "One of the goals is to find that out through the inspection. Overall, I have no complaints or dissatisfaction, but we'll check and see."

Eesti Post's business is divided into two segments, with parcel services making a profit but the traditional postal service proving unprofitable.

Bo Henriksson, former chairman of the board, was also suprised by the minister's decision to inspect the company.

Henriksson said: "The actual situation at Eesti Post is not bad at all. The only thing that we should be aware of is that the postal business is having problems because revenues are decreasing and costs are increasing, the state should do something."

Strictly speaking, it is not a special inspection

Andres Vutt, Associate Professor in Commercial Law at University of Tartu, explained the term "special inspection" is perhaps too widely used in Estonia. In actuality, the inspection protects the interests of smaller shareholders who can initate such inspections at board meetings.

Vutt noted: "If a special inspection is initated at a state-owned company and it is done to identify the effectiveness of management, then legally speaking, it is not a special inspection - the minister just wants to figure things out. But he might need it to add weight to his statements."

Vutt added however that it does not matter much what it is called, what is important is that a minister would be capable of getting answers to questions about state-owned companies.

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