The CEO of the National Emergency Supply Agency NESA Tomi Lounema has resigned after a scandal involving millions of euros spent on masks from China, ordered through a company in Estonia, which was done without due diligence.
Some 230,000 masks which arrived in Finland on Tuesday afternoon were not high quality enough to be used in hospitals.
Minister of Employment Tuula Haatainen (SDP) made the announcement about Lounema’s resignation at a Friday evening press conference in Helsinki; while earlier in the day Prime Minister Sanna Marin said she had lost confidence in him.
What’s the background to this incident?
Just 24 hours before his resignation, Lounema has outlined the details of two transactions to procure medical-grade protective equipment for frontline healthcare workers.
One deal was signed with Onni Sarmaste, a businessman with a history of bad debts who runs a payday loan company. The other deal was with Tiina Jylhä, a woman who runs a plastic surgery business in Estonia.
NESA paid around €5 million for these deals but Lounema admitted his organisation hadn’t done the proper background checks on the individuals they were doing business with.
Adding further intrigue to the story is an accusation to Finnish newspapers by Onni Sarmaste that Tiina Jylhä and her partner had hired Hells Angels to collect money that she claimed he owed her for the deal.
NESA says they deviated from the normal procurement process and made transactions involving people who would normally be excluded from this sort of deal.
“We were, of course, deeply disappointed and sorry that the first batch of goods delivered was not in accordance with the order and that we did not observe the due diligence that we can reasonably expect from us in checking the backgrounds” Lounema said on Thursday.
He had previously told News Now Finland that doing business with suppliers in China is a risk.
“It costs millions and millions. When buying one big airplane full of masks it costs a few million euros. This is big money, but there is no other possibility. We have to get those materials and the Finnish government has ordered us to do it” he said shortly after the first plane of protective equipment arrived at Helsinki Airport.
Lounema says it is a “quite chaotic situation” in China with different countries and agencies competing for the same supplies.
“You have to pay first, then you get what you get. This situation is totally not normal. The risks are very high when you operate in this market” he said.