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Finnish Court Dismisses Bribery Charges Against Patria

Feb. 5, 2014 - 05:35PM   |  
By GERARD O’DWYER   |   Comments
A Finnish court has dismissed charges of aggravated bribery against five former Patria executives in connection with the sale of AMVs to Slovenia.
A Finnish court has dismissed charges of aggravated bribery against five former Patria executives in connection with the sale of AMVs to Slovenia. (Wikipedia)
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HELSINKI — A Finnish court has dismissed charges of aggravated bribery against five former Patria executives.

The State Prosecutor’s Office (SPO) had filed charges accusing the executives, including former CEO Jorma Wiitakorpi, of using illegal cash inducements to secure a $312.7 million armored modular vehicle (AMV) contract from Slovenia in 2006.

The court heard that Patria had contracted Austrian consulting firm RHG Riedl to support its AMV marketing and sales negotiations with Slovenian officials. According to the SPO indictment, RHG Riedl hired several representatives in Slovenia to “advance Patria’s tender” with the Ministry of Defense and the prime minister’s office using a special $10 million “consultancy fund” provided by the Finnish company.

However, all charges against the five ex-Patria executives were discharged by the Kanta-Häme District Court due to what the ruling judge described as the “lack of concrete evidence” brought by the prosecution. The court found that the SPO, which had accused the executives of complicity in the payment of bribes to Slovenian officials to win the contract, failed to provide tangible evidence to prove its case.

Moreover, the court awarded legal costs in excess of $1.2 million to the five accused men.

Along with Wiitakorpi, the SPO had named Heikki Hulkkonen, a director of Patria Vehicles (now Patria Land Services) at the time of the deal, as a key suspect in the alleged bribery action.

The court found that the SPO had not offered sufficient proof beyond a reasonable doubt that Patria or the accused had been part of any illegal enterprise to pay cash bribes in the form of straight payments or inflated consultancy fees to Slovenian state officials, military personnel or other third parties.

State prosecutor Jukka Rappe said the SPO would decide shortly whether or not to appeal the ruling. “The court dismissed the charges because of a lack of evidence, but it did acknowledge that reasonable doubts existed to suggest that everything was not right with this defense deal with Slovenia,” Rappe said.

The SPO, which had sought two year prison sentences for the accused, is expected to investigate more deeply to what extent “supplemental payments” may have been used by Patria to improve its chances of winning the $312.7 million contract.

Patria said the court’s ruling confirmed the results of its own internal investigations that the sale of 135 AMVs to Slovenia in 2005-2007 was conducted using best business and ethical practices.

“The district court’s decision was as expected. We consider the decision justified, both judicially and in light of the evidence,” said Sirpa-Helena Sormunen, Patria’s general counsel.

The legal investigations into the Slovenian AMV deal caused a significant setback for Patria. Of the 135 AMVs slated for delivery in the original contract, just 30 were eventually exported.

In July, a Slovenian court handed down two-year prison terms to a number of high-ranking state officials, including former Prime Minister Janez Janša. All were convicted of accepting cash payments connected to the AMV deal.

It is unclear, said Rappe, what impact the Finnish verdict may have on appeal cases linked to the Patria defense deal in Slovenia and Austria. “Cases in each country are being brought independently and under local anti-crime laws,” he said.

District courts in Slovenia and Austria handed down guilty verdicts on bribery charges connected to the Patria deal in 2013. These are under appeal by the accused. In Slovenia, those involved in the appeals include Janša, ex-Slovenian Army Brig. Tone Krkovic, and Ivan Crnkovic, the former general director of engineering firm Rotis, Patria’s local business partner.

In Austria, Hans Wolfgang Riedl, the CEO and owner of RHG Riedl, was sentenced to three years in prison by a Vienna lower court in April. The charges in this case included bribery, fraud and tax evasion for his role in managing and channeling funds provided by Patria in Slovenia. His sentence is also under appeal.

A producer of defense, security and aviation life-cycle support services and technology, Patria is 73.2 percent owned by the Finnish government and 26.8 percent by the Airbus Group.■


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