The retrospective special audit was conducted by the law firm Sorainen and focused on actions taken by a previous management board of Eesti Energia.

Audit scope and focus

The audit examined the period of soaring electricity prices, the effects of the COVID-19 pandemic, and the early stages of the invasion of Ukraine, uncovering potential violations at the state-owned energy generator.

Finance Minister Ligi clarified that the report does not evaluate the current board's activities, as it is retrospective in nature.

Ligi told ERR on Thursday: "It is relatively difficult for me to explain everything over the phone. This special report is essentially a retrospective. We are not discussing the current board's present activities."

"This concerns the previous board, not the current one, so harm has been done to the company," Ligi added.

Findings on management errors and their reversal

Among the issues highlighted was the "organizational mistake" of attempting to separate the subsidiary Elektrilevi, which operates the bulk of the national electricity grid, from Eesti Energia.

Ligi noted that this decision, taken under the previous management, has since been reversed.

He explained: "Environmental requirements are being managed. Forward transactions that caused direct financial losses have been stopped to prevent such reckless actions in the future."

Ligi emphasized that the report's findings involve serious concerns rather than merely incorrect price forecasts or pandemic effects.

While he did not fully disclose the nature of these concerns, he said, "Perhaps I will be able to discuss this in more detail later, but I wouldn't want to reveal everything just yet. It's not about incorrect price forecasts; the situation is somewhat worse than that."

He dismissed claims that the report could be characterized as a "witch hunt" against former Eesti Energia CEO Hando Sutter, allegedly orchestrated by the then-prime minister Kaja Kallas.

Ligi: No malicious intent, rather mistakes made

Instead, Ligi underscored that the issues stem from collective decisions and false data rather than malicious intent.

He assured: "No one is going to prison, as far as I know," while stressing that the primary problems identified were production-related and rooted in management practices.

Personnel decisions tied to these findings have already been made, he noted.

The audit, which covered Eesti Energia's internal oversight from 2020–2023, revealed that many of the issues it flagged, including the problematic restructuring of Elektrilevi and financial losses from forward transactions, had already been addressed.

These actions included personnel changes, structural reforms, and the reversal of the Elektrilevi separation project.

Eesti Energia announced in September that over 700 employees from its subsidiary Enefit Connect would be transferred back to Elektrilevi, reversing the 2020 restructuring decision.

Ligi added that the current Eesti Energia board, led by Andrus Durejko since early 2023, cannot be criticized for past issues, as these have been addressed.

However, challenges remain, particularly in transitioning away from oil shale and meeting environmental regulations.

"In that sense, this report is a crucial support for us, but much of the work has already been done by internal oversight," he said.

The report also raises questions about whether older, non-compliant plants can operate during crises and periods of soaring electricity prices, such as those seen on the Nord Pool exchange in recent years.

Ligi highlighted nuanced differences between oil and electricity production as factors complicating these discussions.

Future challenges and current board's role

The hiving off of Elektrilevi is no longer under consideration, as Ligi reiterated the economic risks and restructuring challenges for Eesti Energia make such a move unnecessary.

"Dealing with outdated technology and broader tensions in the sector means these decisions are too complex to revisit right now," he said.

Ligi concluded that the report, which will soon be presented to the government following its review, reflects a comprehensive assessment of Eesti Energia's oversight during a tumultuous period.

While it identifies critical issues from the past, much of the necessary corrective action has already been implemented, Ligi said.

The Ministry of Finance's audit on Eesti Energia's management from 2020–2023, detailing irregularities is being presented by key officials at a press conference today, Thursday.

Ligi's predecessor as finance minister, Mart Võrklaev (Reform), announced in April the special audit of Eesti Energia, aimed at evaluating its management practices amid longstanding performance issues. The state sought to determine whether systemic errors occurred and the extent of responsibility borne by the previous management board.

On the publication of the report he commissioned, Võrklaev criticized the then Eesti Energia supervisory board, distinct from the management board, as led by Mait Palts, for what he called its poor oversight.

Contrastingly, he praised current CEO Durejko's open approach since 2023, and highlighted the special audit as a catalyst for structural reforms and improved supervision.

Võrklaev said: "The amounts of damage incurred are very large... it raised the question of whether risks were adequately assessed and whether the duty of care was sufficiently fulfilled."

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