Nokia chiefs cashed in on optimism
David Teather
Saturday September 22, 2001
The Guardian
Senior executives at mobile phone maker Nokia were yesterday reported to have sold share options worth €21m (£13m) shortly after issuing a forecast of sales that proved to be wildly over-optimistic.
The reports from Helsinki, where the world's largest handset manufacturer is based, said the directors, including chief executive Jorma Ollila, had sold about one-third of their options after the April statement.
In the first-quarter figures, Nokia said it had extended its global leadership and expected to see sales growth of 20% during the year. It followed profit warnings from its main rivals, Motorola and Ericsson, and investors had been expecting the company to follow suit.
But in June Nokia stunned the markets with a profits warning of its own which said second-quarter earnings would be as much as 25% lower than anticipated. Sales growth, it added, would be less than half that previously expected.
Nokia denied any wrongdoing. "We have followed the guidelines when it comes to how we inform the market and immediately when we see such changes. That was what we did when we saw a very quick downturn in sales in May - we informed the market," a spokeswoman for the company said.
According to the newspaper Hufvidstadsbladet, Mr Ollila sold 100,000 of his 400,000 stock options after the April statement, banking around €8m. Finance director Olli-Pekka Kallasvuo sold 50,000 of his 140,000 options, netting more than €4m.
The head of Nokia Mobile Phones, Matti Alahutha, sold 35,000 of his 140,000 options, earning him €3m, while the head of Nokia Networks, Mikko Heikkonen, sold half of his 100,000 options, making €3.8m.
The newspaper said only two out of nine senior management at Nokia did not sell any shares during the period.
The Helsinki stock exchange said it saw no reason to launch an investigation.
"We have guidelines for insider trading, we knew Nokia was implementing these and from what we have seen, Nokia has followed them," said Pekka Peinonen, the senior vice-president for equity trading at the exchange.
Nokia's share price has halved since April from €35 to around €17.
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