On 14 November 2016, HKScan announced plans to initiate an internal investigation into its Baltic business to ensure its adherence to the principles of good governance and HKScan’s Code of Conduct. Certain members of the Baltic management team were suspended from their duties for the duration of the investigation, during which Anne Mere was appointed as the interim head of the Baltic business on top of her existing responsibilities as Group CMO.
The investigation confirmed that certain members of HKScan’s Baltic management have systematically committed severe violations of HKScan’s Code of Conduct and the principles of good governance. HKScan has accordingly terminated the managerial and employment contracts of Teet Soorm, General Manager Baltics, Mati Tuvi, Vice President, Baltic Pork Primary Production, Lauri Kallikorm, Vice President, Baltic Poultry Primary Production and Hindrek Smidt, Technical Manager of Baltic Pork Primary Production. HKScan additionally issues a warning to several other employees for breaches of conduct related to the expenditure of corporate funds.
Some members of the management of HKScan Estonia AS have purchased goods and services from companies managed either by members of HKScan’s Baltic management team or by their related parties. The combined value of these purchases totalled about EUR 28 million between 2013 and 2016. The related contracts failed to comply with the principles of transparency required by HKScan and expected of listed companies, and the decisions made concerning the terms of these contracts resulted in a clear conflict of interests between HKScan and the subcontractor. The subcontractors in question are involved in pig and poultry primary production, the feed business or services such as transport and maintenance, which are closely connected with HKScan’s core business.
HKScan’s Code of Conduct specifies that employees should seek to avoid situations leading to a conflict of interests between the Group and the employee or other stakeholders, their relatives or companies controlled by them.
“It is good that we have have identified these breaches of good conduct and have taken immediate steps to intervene. It is important to us that both our management and all employees observe our Code of Conduct and that we adhere to the principles of good governance in our day-to-day work,” says CEO Jari Latvanen. “Now we can move ahead and focus on the future. The Baltic region is one of our most important home markets. We have an expert Baltic personnel with whom we can continue building our business with even greater determination and on a more solid basis than before.”
For further information:
Jari Latvanen, CEO HKScan Corporation
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HKScan is the leading Nordic meat expert. We sell, market and produce high-quality, responsibly-produced pork, beef, poultry and lamb products, processed meats and convenience foods under strong brand names.Our customers are the retail, food service, industrial and export sectors, and our home markets comprise Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2015, HKScan had net sales of approximately EUR 1.9 billion and some 7 400 employees.