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Ministry of Finance to conduct special audit regarding Arsenal sell-off

Arsenal Shopping Centre in Põhja-Tallinn.
Arsenal Shopping Centre in Põhja-Tallinn. Source: Rene Suurkaev/ERR

Minister of Public Administration Mihhail Korb (Center) has ordered a special audit to be conducted at Estonian state-owned real estate firm Riigi Kinnisvara AS (RKAS) and former subsidiary Erika Neli AS to establish the circumstances of the sale of the property of the former Arsenal factory, an ownership stake in which later turned up in the hands of prominent Reform Party member Rain Rosimannus.

"The suspicion that an ownership stake was concealed in the sell-off of Arsenal Centre has cast a shadow on the lawfulness of the operations of the state-owned company," Korb said in a press release. "When someone conceals their stake in a purchase and sale transaction, there's usually a reason for it. Suspicions of corruption must be investigated thoroughly."

The special audit will be conducted by the Ministry of Finance as representative of the sole owner of RKAS.

It was revealed last week that Reform Party politician Rain Rosimannus holds a 4.65 percent stake in Arsenal Center OÜ, the company which owns the now-completed Arsenal shopping center. "I acquired the option to buy the shareholding in return for borrowed money invested in 2012," Rosimannus told BNS. "I converted the option into a shareholding in December of last year."

He specified that he had spent to the tune of 100,000 euros of borrowed money to buy the shareholding.

After news of Rosimannus' co-ownership of Arsenal Centre broke, several politicians said that the transactions leading to this should be investigated for potential corruption.

The Center Party parliamentary group advised Korb on Tuesday to conduct an audit at RKAS.

RKAS had put the property of the former Arsenal arms and manufacturing plant up for auction with a starting price of 1.52 million euros in June 2012. Only one bid was made, and in July of the same year the property was sold to Arsenal Center OÜ, a company established especially for the acquisition of the property situated at Erika 4 in the Põhja-Tallinn district. The Arsenal complex was the most expensive property sold by RKAS that year.

The construction of the shopping center, according to a disclosure to the stock exchange published by builder Nordecon in 2015, cost seven million euros and was completed in fall 2016. The shopping center has since opened for business.

Editor: Editor: Aili Vahtla

Source: BNS

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