Estonian Artists' Association takes 700,000 euro loan to cover funds lost to fraud

The Estonian Artists' Association council approved a plan to take up to 700,000 euros in loan to cover funds stolen from the association's bank accounts through financial fraud. The Hobusepea 2 building serves as collateral for the loan, and an art auction will be held to repay the debt. An extraordinary general meeting will be convened in the autumn to elect new association leadership.

The Estonian Artists' Association (EKL) intends to take a loan of up to 700,000 euros to cover funds stolen from the association's bank accounts through extensive financial fraud that occurred in May this year. The council approved the board's proposal and authorised the start of negotiations to secure the loan.

Fraud strikes the association unexpectedly

In May this year, it was discovered that approximately 700,000 euros had been withdrawn from EKL's bank accounts within a week through a criminal fraud scheme. The perpetrators gained access to the association's bank accounts and transferred the money abroad under the guise of salary payments. The association's chief accountant fell victim to the fraud, through which the perpetrators also obtained access credentials for online banking. As a result of the fraud, the chief accountant lost not only the association's funds but also their personal savings.

Loan and auction

The Hobusepea 2 building will serve as collateral for the loan, which was valued at 3,140,000 euros in 2014, exceeding the loan amount nearly fivefold. The loan will cover artist salaries, creative grants and other current expenses in the coming months.

To repay the loan, the association will hold an auction selling part of EKL's art collection. The auction will take place 8-10 October at ARS, with works for sale selected by a working group of art experts. Artists and their heirs will receive a 5 per cent resale royalty from the sale. Not everything from the collection will be sold; at least one work by each artist will be retained, and works that speak to the artists and art life will also be preserved. Works donated by artists in support of the association will be added to the auction as well. The loan will also be covered by ongoing rental payments and other association income, and the council will continue to consider the sale of real estate belonging to the association.

Extraordinary general meeting in autumn

The council also approved the board's proposal to convene an extraordinary general meeting in autumn to elect a new president and vice-president for the association until the regular general meeting in April 2028. The exact date will be confirmed in September.

Maarin Ektermann, EKL president, explained the decision as follows: "Although the current board's mandate has two years remaining, the association needs a restart at the management level as well. For us, leadership responsibility has never meant clinging to position at all costs, but in the acute phase of the crisis we have considered it important to draw up a crisis plan and take steps to restore the association's financial stability. In the autumn, when the crisis plan is already beginning to yield results, it is the right time for members to decide who they will entrust with the association's future management."

The current board will continue work until the extraordinary general meeting, and the current council until the regular general meeting in 2028.