Turkish Pension Fund Buys Majority Stake in Finnish Defence Products Manufacturer
(Source: Finnish Broadcasting News; YLE; issued Oct 17, 2019)
An investment fund with ties to the Turkish Army has purchased a controlling interest in one of Finland’s major manufacturers goods used for military purposes.

The Ministry of Employment and the Economy gave a green light for the deal in Helsinki before it was finally closed on 8 April.

Turkey’s OYAK pension fund purchases a 70-percent stake in the Raahe-based firm Miilux, which makes products such as reinforced steel for armoured vehicles.

"It can be attached to the side of a bus or an armoured personnel carrier. It ensures that bullets cannot penetrate [the vehicle]. It’s not for use in weapons or ammunition," Miilux CEO Pekka Miilukangas said.

OYAK is a pension fund that represents Turkish army officers, non-commissioned officers and officials. However in legal terms, it resembles a holding company.

The fund is said to have ties to the country’s autocratic government. According to the UK’s The Guardian, the Turkish government had appointed former generals on the board and the defence ministry had attended annual general meetings.

Miilukangas said that his company’s expertise in protective steel and the pension fund’s army links are unrelated although “someone might think they are”. He added that 90 companies from around the world also have a stake in the fund.
Ministry knew of Turkey links

The deal itself did not attract any special attention in Finland. The defence ministry, defence command, foreign ministry, finance ministry and the national emergency supply agency all backed the sale, which was undersigned by then-economic affairs minister Mika Lintilä.

The government must approve all arms exports by domestic manufacturers. In the Miilux case, officials considered whether or not the deal could be detrimental, for example to national defence. The buyer’s ties to the Erdogan government were known to decision makers at the time.

"For the most part the transaction was considered from a national perspective, but of course we always determine what kind of player a new owner is and who’s really in control," economic affairs ministry specialist Lasse Puroma said.

In an email sent on Wednesday, the defence ministry told Yle that Miilux is not a key player in terms of the defence forces’ security of supply. Miilux has supplied protective steel plates for the Finnish navy's minelayer the Pohjanmaa, but it also produces other products.

No arms exports to countries at war

Last week Turkish President Recep Tayyip Erdogan launched a military campaign in Kurdish-controlled parts of northern Syria.

Based on the value of export licenses granted, Turkey was Finland’s most important arms trading partner last year. The number one export product was protective steel, with Miilux the biggest supplier in that area.

Miilux still has six valid export licenses for sales to Turkey. Its customers are armoured vehicle manufacturers BMC, Otokar, Nurol and Katmerciler as well as shrapnel protector maker Roketsan.

Current government policy is that Finland should not export arms to countries engaged in conflict. This means that it will not grant new export licenses to Turkey and the defence ministry is also reviewing previously-granted licenses with a view to revoking them.

Miilunkangas said that he supported the government policy on arms exports. However he noted that if Miilux’s valid export licenses are nullified, it would have an impact at the Raahe factory.

-ends-







prev next

Official reports See all