Estonian PM to face no-confidence vote over husband’s Russian business links

Estonian PM to face no-confidence vote over husband’s Russian business links
Prime Minister Kaja Kallas delivers a statement on European Day of Remembrance for Victims of all Totalitarian and Authoritarian Regimes at the Maarjamäe Memorial. /
By Linas Jegelevicius in Vilnius August 27, 2023

A logistics company part-owned by Arvo Hallik, husband of Prime Minister Kaja Kallas (Reform), made €1.1mn in revenue shipping aerosol cans and other metal containers to the Russian Federation last year, followed by nearly €475,000 so far this year, according to Estonian daily Eesti Paevaleht (EPL). This totals around €1.5mn in revenue since the war began, according to EPL.

Revelations that Stark Logistics, in which Hallik has a 24.8% stake, continued to transport products made by Metaprint, to Russia, right up to the present and without halting the activity as soon as possible after the February 2022 invasion of Ukraine have raised questions given Kallas’ consistent message that all business with the Russian Federation, not only involving Estonian firms but those across Europe and the West, should have ceased in the aftermath of the invasion, reported.

According to media reports, Stark Logistics, the transport company, has continued doing business with Russia since the start of the full-scale invasion of Ukraine despite government criticism of companies that have done so.

Last week, Kristjan Kraag, CEO of Stark Logistics, told ERR that the company had practically stopped transporting freight to Russia, though had not completely shelved its operations.

"Customers in Estonia, our haulage partners, have dialled back. Our volumes have fallen so much that we've been forced to reorient our activities. We have trucks going to the Baltics, Scandinavia and Poland instead," Kraag was quoted by Estonian media last week.

MPs from the opposition Centre Party spearheaded the initiative to talk to other Riigikogu (parliament) opposition forces on a no-confidence motion againstKallas, who insists she was not aware of the details of her husband’s business.

"Members of the Centre Party Riigikogu group find that Kaja Kallas' scandal has seriously hurt Estonia's reputation," Centre’s chief whip and chairman candidate Tanel Kiik said on August 25.

The company in Russia which is the recipient of the shipments is also owned, via Estonian-registered firm OU Pottala, by Emeri Lepp, the CFO of Metaprint – the company making the exported items.

Stark Logistics had previously sought to minimise its business activity involving shipments to Russia, according to its statements to ERR and other media publications in Estonia, saying that these numbered only a couple per week and that this activity would cease by next month.

However, EPL wrote that this impression is not given by Metaprint's partner company in Russia, OOO Aeroprom, which has on the contrary implied that it wishes to expand its operations.

OOO Aeroprom stated in a report published in February this year that: "In 2023, we will battle to continue production, boost production volume and increase sales revenues, in order to strengthen the company's economic position."

Aeroprom reported revenues slightly higher in the first year of the current phase of the Ukrainian war, 2022, than it had for the preceding year, making it a logical conclusion to draw that it paid at least the same amount to Russian state coffers, via taxation, in 2022 as it had in 2021, and thus contributed to the state funds which could be used to fight the war on Ukraine.

Hallik owns his 24.8% stake in Stark Logistics via Novaria Consult OU, which the prime minister lent €350,000 to, as reported earlier in the summer.

Ostensibly for investment purposes, it is reported that these funds were to be used in order to construct a new residential property.

In the latest development, Hallik said in a written statement sent to the press that he has decided to sell his stake in Stark Logistics and retire from the firm.

"In light of the media coverage that has emerged, I understand that my business activities, shareholding and work in Stark Logistics, a company that has been carrying out transport services from Estonia to Russia for our client AS Metaprint, have raised questions that, regardless of the answers, will affect my wife's work," Hallik wrote, reported.

The Estonia media continues to charge the prime minister with hypocrisy, given she has clearly and consistently called for businesses in general to halt all activity relating to Russia, if they have not already done so. She is also, based on her public statements, seemingly undaunted by any claims of wrongdoing on her or her husband's part.


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