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Konecranes chairman demotes himself after fraud allegations
Stig Gustavson will be replaced by Christoph Vitzthum

Konecranes chairman demotes himself after fraud allegations

Konecranes has announced that the current chairman of its board Stig Gustavson will become its vice-chairman.

In a statement, Konecranes said that the change was Gustavson’s decision and was “due to his age”.

The decision comes five days after Konecranes announced that Gustavson was facing aggravated subsidy fraud charges (in relation to his alleged conduct in a previous position) and three days after the company proclaimed its “continued confidence” in Gustavson” and his “ability to act as the chairman of the board of directors”.

Gustavson will be replaced by Christoph Vitzthum, who is currently a member of Konecranes board of directors and used to be the executive vice-president of Wärtsilä.

The charges against Gustavson relate to his time as chairman of the board of Park East Management Oy between 2011 and 2012.

When asked why the company did not believe the allegations against Gustavson, the then vice-chairman of Konecranes board of directors Ole Johansson told CM: “What we can see and what we know from the background, is that there was no involvement on the part of Mr Gustavson which would give us reason to see that there would be misconduct. It is also very clear that he would have had absolutely no personal interest in this.”

Johansson added: “Mr Gustavson is charged because he was the chairman at the time, but I would emphasise that it was a pro-bono job and he took that position as Konecranes had an interest [in Park East Management’s business park project] at the time.”

Johansson confirmed that nobody else from Konecranes had been charged but declined to comment on whether anyone else from Park East Management had been charged.

Park East Management’s purpose, according to Konecranes, was to help Finnish small and medium-sized enterprises (SMEs) become established in Russia and to develop a business park near St Petersburg. Since Gustavson’s chairmanship, Konecranes said, the company has gone bankrupt.

According to Park East Management’s website, Konecranes is one of its “stakeholders” and one of two shareholders in its subsidiary business Industry Park Morozova. However, Johansson told CM that this information was out-of-date and incorrect.

“Originally, when this park was initiated, there was an idea that Konecranes would be a party to it, and that is also the reason why Mr Gustavson was appointed, but there is no relation whatsoever between this park and Konecranes today,” Johansson said, adding that the business project never really got off the ground.

In a statement, Konecranes stressed that it is not a party in this matter and pointed out that Gustavson denies the charges and “demands the court reject them in the upcoming trial”.

Subsidy fraud is when someone makes an incorrect or incomplete statement relevant to a subsidy, for themselves or for another, to someone with the power to award subsidies.

Aggravation is a legal term which is defined by the Legal Dictionary as: “Any circumstances surrounding the commision of a crime which increase its seriousness or add to its injurious consequences.” Aggravated crimes are punished more severely than ones without aggravation.

According to Finland’s most widely-read newspaper Helsingin Sanomat, if convicted, Gustavson faces between four months and four years in prison.

Johansson told CM that the date of the trial has not been set yet.