Stark Logistics chief opts out of Riigikogu meeting on business in Russia

Stark Logistics.
Stark Logistics. Source: Ken Mürk/ERR

Executive manager of Stark Logistics Kristjan Kraag has announced that he will not participate in the extraordinary joint sitting of the state budget committee and the Riigikogu Anti-Corruption Select Committee regarding wartime business activities in Russia, which is scheduled for this Tuesday.

"We thank you for the invitation to the joint sitting of the committees, however we do not consider it possible to attend your meeting," Kraag said in a letter to the parliament.

"As we have explained publicly, we have not had any clients in Russia since the beginning of the war. We have only one customer, one of the best known and most successful industrial companies in Estonia, AS Metaprint (Metaprint is also owned by Stark Logistics - ed.), for whom we have, among other things, carried out deliveries to Russia. We have done this at the request of an entrepreneur who wishes to wind up his business there in a way that means all previously agreed customer contracts can be fulfilled," Kraag wrote.

"The client's claims have been confirmed by actual statistics - since the beginning of the war, deliveries have decreased by 70 percent. Along with the client, we hoped he would be able to conclude his business in Russia in the coming months, and with it, the last 30 percent of our deliveries to Russia," he added.

Kraag stressed that Stark Logistics has over 2,000 customers in total and the majority of the company's business and revenue is not related to Metaprint.

"As we have laid out transparently in our reports, 40 percent of our turnover has been connected to companies like Metaprint. The majority our business and revenue is not related to Metaprint. However, deliveries to Russia accounted for only around 10 percent of our turnover (not revenue) in 2022, and have accounted for even less, around 5.5 percent, this year, with the remainder of Stark's business connected to logistics and deliveries to customers in Estonia, the Baltics, Scandinavia and Western Europe," Kraag said.

Kraag added that this year, the Estonian state has issued permits to 309 companies, which have legally transported goods to Russia and declared their counterparties.

"The transportation of non-sanctioned goods in this way is legal  and one could consider that it also helps a lot of Estonian companies that have not yet been able to leave Russia. [Either] because they are not allowed to, are not granted permits to sell their assets, or are prevented from leaving due to other administrative measures, which repress employees or even endanger entrepreneurs and their families," Kraag said.

"All the relevant authorities have now confirmed that Stark Logistics AS has not transported sanctioned goods or violated any laws in this regard," he added.

We believed we were doing the right thing

"We have believed for these 16 months that we are doing the right thing by helping Estonian entrepreneurs. What we didn't appreciate is that for many Estonians things might look different due to the family connections of our former colleague Arvo Hallik. We understand this now and are working towards putting an end to these deliveries with our vehicles."

On August 24, Kraag told ERR on that since the start of Russia's full-scale invasion, he and his colleagues in the company have constantly discussed whether it is morally right to provide help to an Estonian entrepreneur, the majority shareholder of Stark Logistics, during what is a very bad situation. "So far, collectively, we have always decided that, all things considered, it is. Now, of course, we understand that not everyone sees it the same way and that is why we will end this cooperation with Metaprint in September," says Kraag.

"For our part, we apologize for having caused such confusion. Our business, as is always the case in the logistics and transport industry, is very clear, simple, transparent and straightforward," Kraag said. 

"We believed that, in addition to being legal, we were doing the right thing, helping our business partner to get their money out [of Russia] and benefiting Estonia. We have said everything that we know and our role in the public debate surrounding this issue has been exhausted," Kraag added.

Kraag also said that the company plans to refute any false allegations using all legal means available to it in Estonia. 

On Tuesday, the state budget committee and the Riigikogu Anti-Corruption Select Committee are set to convene for an extraordinary joint sitting. The purpose is to discuss business activities in Russia during the war.

Prime Minister Kaja Kallas, Estonian Tax and Customs Board Director Raigo Uukkivi, executive manager of Metaprint AS Martti Lemendik, executive manager of Stark Logistics Kristjan Kraag and a representative of the National Audit Office have all been invited to attend.

On Wednesday, ERR wrote that Stark Logistics, a transport company partly owned by Prime Minister Kaja Kallas' (Reform) husband Arvo Hallik, has continued to do business in Russia during the war in Ukraine, despite government criticism of companies that do so.


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Editor: Michael Cole

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