The reason for the sale is debts incurred; the property had ended up in private hands and away from municipal control during and after the course of local government reforms in Estonia in 2017.

In August 2021, the Prosecutor's Office charged former Otepää mayor Kaido Tamberg (SDE) and deputy mayor Kajar Lepik with misuse of municipal property, including Sangaste Castle (Sangaste loss), a 19th century former manor house around 25 kilometers southwest of Otepää, Valga County.

In August this year, the second-tier Tartu Circuit Court sentenced Tamberg and Lepik to 30 day's imprisonment (technically referred to as "shock imprisonment" – "Šokivangistus" – ed.), while the pair are also required to pay €62,225.92 in damages to Otepää Rural Municipality, regional daily Lõuna-Eesti Postimees writes (link in Estonian).

Otepää council deputy Kuldar Veere (Reform) had in January 2020, when Tamberg and Lepik were first detained on suspicion of corruption, told ERR (link in Estonian) that so far as far as ownership status of the castle was concerned, a joint venture had been made between the municipality, as majority owner, and businessman Heiki Moltsaar, whose companies would manage the property jointly with the municipality.

Veere said that: "Next, time passed by, and the next transaction involved the Sangaste municipality deciding to relinquish its participation in favor of an NGO. No money was received for that, though an illegally long payment term of five years was applied. At first, the intention was the municipality obtain the assets of this NGO, when this one-time NGO was dissolved."

"Also, the statutory provision was also changed at Tamberg's proposal so that the property of the NGO was distributed according to a decision of a general meeting. Via this decision, the municipality no longer had a majority vote, but became one of five shareholders. All the other [shareholders] were private companies. To sum up, the situation is one where the municipality is without both the castle and its participation [in running the castle], while if we take look at who the real beneficiaries of the caste are, they are in fact the natural persons (a specific legal term – ed.) Heiki Moltsaar, plus his wife, Annabel Moltsaar," Veere went on.

Heiki Moltsaar is the cousin of Kaido Tamberg, ERR reports.

Located on a plot of 16,229 square meters whose use is registered as commercial land, the Sangaste Castle boasts 16 rooms and can cater to events with up to 150 guests, ERR reports.

Tartu bailiff Oksana Kutšmei is placing the property up for public bidding at the auction center (Oksjonikeskus.ee) with a starting price of €2.6 million as noted.

Registration to take part in that auction opened Monday, September 18, and will remain open to the end of October.

The auction itself starts on October 31 and runs to November 7 inclusive, and is being held online.

Sangaste had previously belonged to the municipality of the same name; the local government reforms of 2017, which slashed the number of rural and city municipalities in Estonia from over 200 to the current 79, led to the former Sangaste municipality being folded into Otepää Rural Municipality.

It was during this time that the property, via a complex scheme perhaps as outlined above by Kuldar Veere, came to enter into private hands.

Completed in 1881, Sangaste Castle (pictured) was designed by Baltic German architect Otto Pius Hippius and is a noted for its red brickwork and synthesis of more than one architectural style, including Gothic. The building was used as a pioneers camp during the Soviet period; in 2000, the state handed over the property to the-then Sangaste municipality.

ETV news show "Aktuaalne kaamera" reported Tuesday evening that the debts incurred to the municipality in respect of Sangaste come to €600,000 in respect of court cases pertaining to the private sector companies noted above, while another creditor also wishes to collect, though the latter sum was not reported.

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