Supreme Court sends Rovaniemi investment case back to district court on new grounds

Rovaniemi’s years-long investment dispute is heading back to court after Finland’s Supreme Court introduced a new legal basis for examining the case. The Lapland District Court, which first handled the matter in 2022, must now reconsider the compensation claims.

The case began with the city’s decision in 2017 to invest €2 million in Front Finance, a finance and investment company that later went bankrupt. Rovaniemi lost hundreds of thousands of euros in principal. It also emerged that Front Finance operated as a payday-loan company.

The investment decision led to an official-crime investigation into the conduct of group legal counsel Heli Välikangas and her supervisor. Välikangas had also invested her own money in the same corporate group without informing the city. The district court found that this made her disqualified from handling the matter.

The lower courts concluded that Välikangas’s conduct met the elements of abuse of public office, but rejected the criminal charge because it had become time-barred. They also held that she and another person owed more than €200,000 in compensation, reasoning that the group legal counsel exercised public authority while preparing the city government’s investment decision.

The Supreme Court’s new assessment changes that point. It ruled that Välikangas was not exercising public authority when she prepared the decision, meaning she was not liable to compensate the city under civil-servant legislation. The case nevertheless continues because Rovaniemi had alternatively argued that the conduct amounted to fraud or fell under another provision of the Damages Act. The lower courts had not examined those grounds, so the Supreme Court sent the matter back through the ordinary court process.