The Ministry of Environment sold dwellings in breach of the Government Property Act

9/23/2003 | 12:00 AM

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TALLINN, 23 September 2003 - In the opinion of the SAO the Minister of Environment, Heikki Kranich has violated the Government Property Act in connection with determining the sale of three apartments in 2001. Government apartments have been sold, by way of misusing official position and not organising a public auction, on favourable conditions to officials, who worked in bodies administered by the Ministry and had no right to privatise the apartments.

During the audit of the accounts of the Ministry of Environment the SAO found that on December 21, 2001 the Minister of Environment had issued a Directive ordering the privatisation of three dwellings with a total residual value of 487,555 kroons.

The apartments were sold to officials working in bodies administered by the Ministry and occupying these for a total price of 50,115 privatisation vouchers. For the single-room apartment in Keila (total area of 16.2 m2) 4,230 vouchers were received and the respective figures for the two-room apartment in Tallinn on Pärnu road (total area of 39 m2) and for the four-room apartment in a semi-detached house in Kuressaare (total area of 127.6 m2) were 7,605 and 38,280.

The apartments have been privatised in accordance with the Privatisation of Dwellings Act. The said Act provides that a dwelling may be privatised, if it was owned by an obligated subject at the time of entry into force of the Privatisation of Dwellings Act (May 29, 1993) or it has been transferred to the ownership of an obligated subject under the Privatisation Act or Agricultural Reform Act. The sold apartments were not subject to privatisation for the following reasons:

  • the single-room apartment in Keila was entered in the balance sheet of the Information and Technology Centre of the Ministry of Environment for completion and accommodation on September 25, 1996; 
  • the State Chancellery purchased the two-room apartment in Tallinn on April 21, 1995 from a private person and subsequently transferred it to the Information and Technology Centre;
  • the apartment in the semi-detached house in Kuressaare was completed in 1995.

In all three cases the lease contracts have been either renewed or concluded in the spring of 2001.

Government property must be entered in a government property register and the dwellings listed in the said register are not subject to privatisation. Before the sale of apartments the Ministry of Environment requested that the apartments be deleted from the said register, indicating the reason for the request were applications submitted for the privatisation of dwellings. All apartments were deleted from the register on December 20, 2001, i.e. one day before the Minister’s Directive was issued.

The SAO has addressed an information request to the Legal Chancellor, who thinks that the aforementioned transactions have violated the Government Property Act.

As a result of these transactions, the government suffered a loss, which, in the opinion of the SAO, is equal to the difference between the market value of the apartments at the material time and the price paid by the buyers. In his response the Minister of Environment, Villu Reiljan states that the Ministry takes note of the findings of the SAO and awaits an opinion from investigative bodies.

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

  • Posted: 9/23/2003 12:00 AM
  • Last Update: 10/2/2015 4:35 PM
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