Anne Mere, the current chief marketing officer (CMO) of the HKScan group, will carry on as interim general manager of HKScan's Baltic business.

"It is good that we have identified these breaches of good conduct and taken immediate steps to intervene," the group's CEO Jari Latvanen said in a press release. "It is important to us that both our management and all employees observe our Code of Conduct and that we adhere to the principles of good governance in our day-to-day work. Now we can move ahead and focus on the future. The Baltic region is one of our most important home markets. We have an expert Baltic personnel with whom we can continue building our business with even greater determination and on a more solid basis than before."

The investigation confirmed that certain members of HKScan's Baltic management have systematically committed severe violations of HKScan's Code of Conduct and the principles of good governance, the company said.

HKScan has accordingly terminated the managerial and employment contracts of Teet Soorm, General Manager Baltics, Mati Tuvi, vice president of Baltic Pork Primary Production, Lauri Kallikorm, vice president of Baltic Poultry Primary Production, and Hindrek Smidt, technical manager of Baltic Pork Primary Production. In addition, a warning was issued to several other employees for breaches of conduct related to the expenditure of corporate funds.

According to HKScan's press release, the investigation found that certain members of the management of HKScan Estonia AS had purchased goods and services from companies managed either by members of HKScan's Baltic management team or by their related parties. The combined value of these purchases totaled about 28 million euros between 2013 and 2016. The related contracts failed to comply with the principles of transparency required by HKScan and expected of listed companies, and the decisions made concerning the terms of these contracts resulted in a clear conflict of interests between HKScan and the subcontractor. The subcontractors in question were involved in pig and poultry primary production, the feed business or services such as transport and maintenance, which are closely connected with HKScan's core business.

HKScan's Code of Conduct specifies that employees should seek to avoid situations leading to a conflict of interests between the group and the employee or other stakeholders, their relatives or companies controlled by them.

The group started an internal investigation into its Baltic business and relieved some members of the management team of their duties for the duration of the inquiry in mid-November. Mere was appointed interim general manager reporting to Latvanen.