FINLAND - Markku Kauppinen, the chief executive of Finland's Local Government Pensions Institution (Keva), resigned yesterday following allegations of corruption concerning his political role and investments made by the pension fund. Yet supervisory officials today stated its own investigation found there was no sign of any wrongdoing.

Kauppinen announced yesterday he had decided to resign as CEO of Keva after Finnish media alleged his position at the body - running pension schemes for 400 local authorities - was potentially being used as a source of funding to the Central Party, in his capacity as former MP and now CEO of the pensions body.

While he strongly refuted any allegations of funding irregularities, Kauppinen said he felt it was necessary to step down as CEO to reinstate trust and confidence in the pensions regime and Keva in particular, as the saga threatened to damage the state pension fund.

The Finnish media had alleged there were questions around a political donation to the Central Party from Nova Group, a motorsled manufacturer, and a subsequent decision by Keva to invest in a real estate project at that firm.

However, a report published today by the Financial Supervisory Authority cleared officials at Keva and Nova of any wrongdoing and said activities between Keva, Nova and Kauppinen were legal, met all property investment criteria, and had been managed in exactly the same way as any other real estate transaction would be considered.

Timo Vikerkenttä, deputy CEO at Keva, said Kauppinen had concluded that although the authorities would not find anything untoward, there had been so much public criticism that he felt "the only real thing to do was resign".

Keva announced today it is now searching for a new CEO and hopes to fill the position by the end of the year.

In circumstances where there is no CEO, one of the two deputy CEOs - with responsibility for administration - takes up the mantle, according to Vikerkenttä, so Eija Lehto-Kannisto will assume the role until a permanent appointment is made.

It is too early to say whether these latest developments will derail or delay the pension body's full strategic review of operations, added Vikerkenttä, as it is still hoped the investment strategy and administrations can still be completed by next December.

That said, some progress has been made as LGPI this week signed a deal with Ortec Finance to license its asset liability services.

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