Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Opposition activist Navalny's call for mass protests a success as thousands take to the streets across Russia
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Retailers and restaurant owners threaten protests in Bulgaria if reopening is delayed
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
Estonia likes to trumpet its transparent business environment almost as often as it rides its e-economy hobby horse, so a major corruption scandal at the very top of what is one of the country's most important state-owned strategic assets - the Port of Tallinn - is causing waves that threaten to wash away far more than the country's squeaky-clean (and often self-congratulatory) reputation.
On August 26 officers of the Internal Security Service, known by its acronym 'KAPO' - the same outfit that cause celebre Eston Kohver works for - swooped on the offices of the Port of Tallinn (slogan: the Port of Good News) and arrested board members Alan Kiil and Ain Kaljurand. The pair were remanded in custody on suspicion of accepting bribes, charges that they deny.
Their arrests followed the questioning and release a day earlier of six other unnamed individuals in connection with the bribery investigation.
The probe is believed to centre on a rigged ferry tender involving Poland and possibly Turkey. Corrupt practices could extend as far back as 2009, the office of the Prosecutor General said.
The Polish connection was confirmed on September 1 when Poland's Central Anti-Corruption Bureau (CBA) said it had raided offices in Gdansk at the request of the Estonian authorities. "The Central Anti-Corruption Bureau conducted certain activities on August 26 at the request of the prosecutor's office of the Gdansk region," CBA spokesman Jacek Dobrzynski, said, according to Estonian national broadcaster ERR.
And it doesn't stop there. In what looked like pre-emptive action, HTG Invest, a subsidiary of ferry-to-hotels group Tallink, said it had started an internal investigation in connection with allegations that it was involved in paying bribes to Port of Tallinn board members.Tallink is the country's largest private business and a darling of the Baltic stock markets, regularly registering as the most-traded stock on the OMX Baltic lists.
Despite its well-publicised high rankings in ease of doing business surveys and its membership of the Organisation for Economic Cooperation and Development, corruption is by no means unknown in Estonia, and usually comes with the sound of political strings being pulled.
What makes the Port of Tallinn case so interesting is not just the involvement of such a key company or the potential size of the graft - according to newspaper Eesti Ekspress the bribes amounted to €4.1m, of which Kiil took €3.8m - but that the two people at the centre of the scandal offer perfect representations not only of the old-school political businessman (Kiil) but also the modern, measured, moderate face of Estonian business (Kaljurand).
52-year-old Kiil seems to be straight out of the "How To Make Money In The Post Soviet Space" playbook. A former private businessman and head of Paljassaare Port, his career really took off once he switched allegiance from the populist People's Party to the business friendly Reform Party which has bossed the political scene for more than a decade.
Soon he was chairman of Harku Parish council, where he gained a reputation for his domineering style, even going so far as to call a vote of no-confidence in 2007 in his own administration to show his displeasure with opposition from within the party.
After that, he headed to Port of Tallinn, taking charge of the procurement contracts while Kaljurand handled most of the day-to-day management of the company.
50-year-old Kaljurand in contrast is the sort of executive you see adorning the covers of business magazines, all rolled up sleeves and manly jaw. Joining Port of Tallinn in 2005 he is big on the need to attract business from China and had big ideas too, even talking about making Tallinn a rival not just for Riga and Helsinki but for Rotterdam.
He lists his interests as "tennis, running and folk dancing". Where Kiil is all confrontation and controversy, Kaljurand is supposedly the strong and silent type with national daily Postimees quoting an insider saying he "skillfully managed to surround himself with obedient soldiers" while, like Kiil, pocketing a salary in excess of €8,000 per month.
That has led to a good deal of soul searching in the Estonian media and above all an uncomfortable suspicion that perhaps the business environment isn't quite as spotless as everyone assumed. Perhaps Estonian business is just as dirty as it is everywhere else - but better at glossing over inconvenient truths in its obsessive quest to be classified as 'Nordic'?
Neinar Seli, formerly a long-serving chairman of the supervisory board of Port of Tallinn, summed up the feeling well in Postimees, reviving speculation about numerous other suspicious transactions: "So far a special audit has been carried out at the Port of Tallinn, but it should actually be conducted in all big state-owned enterprises. What exactly is [energy utility] Eesti Energia doing in Jordan or in the US state of Utah? Money was paid to American lobbyists - who exactly were these lobbyists? " Seli told the newspaper.
The last big embarrassment for Estonia's state-owned sector was the collapse of national airline Estonian Air when a shiny new revival plan penned by a supposed business wunderkind turned out to be the sort of thing a first year business studied student would baulk at, but costing taxpayers around €80mn.
"Where did €80mn of taxpayers' money go? It would be good to know if everything is fine with that," Seli added.
Seli's comments may be apposite but they are also rather late. When former economy minister Juhan Parts suggested as early as 2010 that the Kiil-Kaljurand axis at Port of Tallinn was becoming perhaps too powerful, it was Seli, in his capacity as chairman of supervisory board, who chose to ignore the advice. In 2014 the two Ks had their contracts renewed for another five years after beating off competition from 17 other applicants for their jobs.
Five years on, Parts' fears appear to have been justified. His successor as economy minister, Kristen Michal (from the same Reform Party as Kiil), said on September 2 that he favoured removing politically-connected members from the boards of state-run companies and pressing ahead with privatisation.
"Where the market works and there are no obstacles, then the state should not be a major shareholder in those markets," Michal said, according to ERR.
As for the Port of Good News, with Kiil and Kaljurand both resigning, Marko Raid, current Chief Financial Officer, and Carri Ginter, an attorney, have been appointed as temporary members of the management board.
"We will also shortly announce a public competition for the posts of new members of the management board and make sure that security checks are carried out among the candidates," said Remo Holsmer, the current chairman of the supervisory board.
Reflections from our correspondents on the ground in the Baltic states of Estonia, Latvia and Lithuania.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: