Issues related to dissolution of the Compensation Fund

6/27/2003 | 12:00 AM

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TALLINN, 27 June 2003 - The audit by the SAO examined the legality of transactions made at the end of the dissolution period of the Compensation Fund.

The audit revealed that although the Compensation Fund Act permits the remaining funds to be transferred only to the Stabilisation Reserve Fund, deposits in the amount of 45 million kroons were nevertheless transferred through the Ministry of Economic Affairs and Communications to Kredex (offers housing loans guarantees) and Enterprise Estonia pursuant to an order of the government.

Besides, the Fund acquired Hansa Money Market Fund shares in the amount of 82 million kroons pursuant to an order of the government in March this year, and transferred them to the Ministry of Finance, and the latter had to use the shares to increase the share capital of Riigi Kinnisvara AS (State Real Property Ltd). At the moment the shares are on the balance sheet of the Ministry of Finance, and the SAO has sent materials to examine the legality of the transfer of the shares to the Parliament’s Finance Committee.

The state has tried to justify the transactions by reasoning that the issue is not about the transfer of money, but of assets to the administrators of the state assets. The Compensation Fund Act allows for such a transaction. However, deposits are considered monetary resources according to the Estonian Kroon Guarantees Act as well as the balance sheet layout of the Compensation Fund. Therefore, these sums should have been transferred to the Stabilisation Reserve Fund.

The above evaluation is based on the expert legal assessment performed by Lasse Lehis, Doctor iuris, University of Tartu.

Sven Soiver
Press Representative of State Audit Office
Telephone: (372) 640 0787
GSM: (372) 53 414464
E-mail: [email protected]

  • Posted: 6/27/2003 12:00 AM
  • Last Update: 10/2/2015 5:44 PM
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