Finland's Minister for Transport and Communications Leena Luhtanen (SDP) (see the picture) says that Tapio Hintikka, who resigned as Chairman of the Board of the telecommunications service provider TeliaSonera late on Sunday, had acted according to rules that had been agreed upon in connection with the merger of Sweden's Telia and Finland's Sonera. Both states own large numbers of the company's shares.

   

Hintikka blamed his problems on the board on "Swedish politics", while Swedish members on the TeliaSonera board faulted what they saw as Hintikka's autocratic management style.

   

Luhtanen said that Hintikka had the confidence of the Finnish state. However, she carefully avoided accusing Sweden of any underhanded action.

   

Prime Minister Matti Vanhanen (Centre) was unwilling to comment on the issue. He noted that quoted companies need to follow the agreements made with shareholders. He also noted that on Friday the TeliaSonera Board will choose a provisional chair from its midst. Final decisions will be made by the company's general meeting at the end of April.

"I will not go so far as to say that any agreements had been violated, but I emphasise that both countries approved the unanimous proposal of the appointment committee headed by Hintikka (on the members of the company's Board). Our policy line has been consistent in this: the shareholder agreement must be adhered to", Leena Luhtanen said.

   

She added that she does not know the details of the discussions held between Hintikka and the Swedes, but emphasised that Hintikka enjoys Finland's confidence, and that the proposal of the appointment committee was unanimous, his decision to resign came as a surprise.

   

As she sees it, the common aim has been to increase international know-how within TeliaSonera, as the company seeks to enhance its position on international markets.

The shareholders' agreement regulating the terms of Finnish and Swedish state ownership covers the composition of the Board of Directors of TeliaSonera until 2005. Under the agreement, Hintikka was to serve as chairman, while four of the company's 12 seats on the board were reserved for Finns, and four for Swedes.

   

Hintikka says that his resignation was prompted by disagreements on the company's ventures into the global market. He would have wanted to replace one Finn and one Swede on the board with a major international figure. However, he withdrew his proposal after opposition from the Swedish side.

The dispute over Hintikka is not the first of its kind in TeliaSonera. When the first discussions were held on the merger of Sonera and Telia a few years ago, the Swedes wanted to name Telia CEO Anders Igel to the Board as an independent member. Finland objected to what it saw as a violation of the shareholders' agreement, and Igel refused to accept the post.

   

Representatives of the Finnish and Swedish personnel disagreed on how staff should be represented on the board, which includes three Swedish, and just one Finnish personnel representative.

The Swedish newspaper Dagens Nyheter wrote on Tuesday that Swedish members of the Board of TeliaSonera had complained to the Swedish government on the management style of Tapio Hintikka.

   

For instance, one of the members of the board, former Prime Minister Ingvar Carlsson had discussed the issue with Prime Minister Göran Persson.

   

According to Dagens Nyheter the members of the Board had grumbled that Sweden had not acted on complaints about the chairman - reportedly because Sweden did not want to upset the Finnish owners.

   

In the newspaper's view, the core of the problem was not a Finnish-Swedish conflict, but rather the personal characteristics of Tapio Hintikka himself.