Secretive Estonian businessman Toomas Tool in court
11.06.2010, 09:29The court started hearings yesterday in the case where Toomas Tool, one of the richest Estonian businessmen, is accused of manipulating the share price of Arco Vara, the largest real estate company in the Baltics, with the objective of taking over the listed company.
According to the prosecutors, Tool instructed SEB stockbroker Karoly Kirber between July 14 and 21, 2008 to sell large quantities of shares of Arco Vara that were held in the securities account of Tool's wife in SEB and which he was authorized to use. The objective was to drive the price of Arco Vara stock lower from the level of 0.56 euros a share that would have put pressure on Hillar-Peeter Luitsalu ja Richard Tomingas who owned 44% of Arco Vara. In this way, Tool sold about 500,000 shares of Arco Vara which pushed down the share price.
By that time Tool had acquired 5 million shares representing a 5.25% holding Arco Vara from former large shareholder Arti Arakas who had a conflict with Luitsalu and Tomingas and wished to leave the company. Arakas is believed to have informed Tool about the repo loans of Luitsalu ja Tomingas which stated that if the company's share price falls below 0.56 euro level, the bank would require additional securities from them or re-possess their holdings.
Luitsalu and Tomingas claims that at a meeting with Tool the latter made it very clear that he knew about their loans and demanded management powers although at that time he owned a fraction of the shares. After Luitsalu and Tomingas refused to give Tool the powers, Tool increased his holding in Arco Vara to 11%.
If found guilty, Kirber and Tool may be fined or sent for up to three years in prison. Both Kirber and Tool say they are innocent.
Little is known about the actual wealth of Tool, but the media have speculated that he owns whole blocks of houses in the Tallinn Old Town.