Businessman at heart of Porto Franco scandal to be freed

Hillar Teder.
Hillar Teder. Source: Priit Mürk/ERR

A businessman at the heart of a corruption scandal which in January brought down Jüri Ratas (Center) as prime minister is to be released from custody, where he has been held since shortly after Ratas' resignation.

Hillar Teder, a property and retail magnate, was one of five suspects in an investigation into suspected influence peddling and bribery centered on the Porto Franco real estate development in central Tallinn.

Another suspect, former finance ministry adviser Kersti Kracht, was freed from custody last month, while the Center Party itself is also a suspect.

Teder's release follows a recent second-tier circuit court ruling, which the prosecutor's office has not challenged. He will be freed by Thursday latest.

Chief State Prosecutor Taavi Pern said that the circuit court agreed with the prosecutor's office that there is reasonable suspicion of criminal offense pertaining to Teder, and that his placement into custody was warranted. The court nonetheless decided that the risk of Teder re-offending could be mitigated via electronic surveillance, Pern added.

Pern said: "The circuit court's arguments were convincing to the prosecutor's office, and the office sees not reason to refute them at the present stage of proceedings. As a result, we have decided not to appeal. Should any circumstances should surface in pretrial proceedings indicating a need to take Teder into custody, we can reapply to the county court for doing so."

Teder and Kracht were detained on January 14, two days after the investigations by the Internal Security Service (ISS) into goings on at Porto Franco became public, prompting Ratas' resignation within hours.

The pair could have been incarcerated for up to two months, but on February 16 the circuit court ruled that Kracht could be released immediately, albeit on a restricted basis; Teder after 15 days, with the e-surveillance proviso.

Center's then-secretary general Mihhail Korb was also a suspect, as were two other unnamed individuals.

Suspicions against Teder revolved around a €1-million donation given to Center last year, an alleged bribe in getting favorable treatment from Tallinn City Government – Center Party dominated – on the issue of access roads to the Porto Franco site, a combined residential/business/retail/leisure complex, close to the ferry harbor.

Majority owner of Porto Franco is Teder's son, Rauno; Kersti Kracht stood charged with facilitating the alleged deal, as well as in brokering a loan on favorable terms from the state-run KredEx foundation for Teder, a body heavily in use during the coronavirus pandemic. Teder and Kracht had allegedly tried to conceal the dealings via money laundering tactics, it is reported.

No actual bribe transactions took place, since the ISS blew open the case before it came to that.


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Editor: Andrew Whyte

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