Porto Franco suspects Teder and Kracht placed under arrest

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Former finance ministry adviser Kersti Kracht. Source: ERR

Businessman Hillar Teder and former finance ministry adviser Kersti Kracht have been placed under arrest in connection with the alleged corruption activities centered on a central Tallinn real estate development which led to the resignation of Jüri Rats (Center) as prime minister.

Both have been arrested for an initial period of up to two months, as granted by Harju County Court in response to a prosecutor's office request.

The pair were declared suspects in an Internal Security Services (ISS) investigation into activities at state credit agency KredEx and a €39-million loan the organization granted to the developers of Porto Franco last September.

The Center Party's Secretary-General, Mihhail Korb, resigned from his post Tuesday as the investigation became public; there are two other suspects in the case at present, both unnamed individuals who are reportedly not public figures. The Center Party is itself also a suspect in the investigation, not for the first time in recent years.

Korb and Teder are under suspicion of striking a deal where the latter, a businessman whose son, Rauno Teder, is majority shareholder in Porto Franco, would donate around €1 million in return for access route rights to the development, in Tallinn's harbor area.

Businessman Hillar Teder. Source: Priit Mürk/ERR

Kracht is suspected of influence peddling in accepting funds in principle from Teder in order to secure a favorable decision for Porto Franco, vis-a-vis the KredEx loan. In practice the ISS intercepted the events before any money changed hands, ERR's online news in Estonian reports, citing BNS.

Teder and Kracht are also suspected of engaging in money laundering in order to conceal the attempted bribe.

Legal representation for Teder, Sandra-Kristin Kärner, and for Kracht, Sander Potisepp, told BNS Thursday that their clients would be appealing the Harju court ruling at the second-tier Tallinn Circuit Court.

Revelations about the activities prompted Jüri Ratas' swift resignation early on Wednesday. The Center Party has long been linked in the Estonian media with large-scale corruption activities, particularly during the leadership of co-founder and former Tallinn mayor Edgar Savisaar. The party currently has a suspended sentence to its name, after being found guilty of accepting an illicit donation.

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Editor: Andrew Whyte

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