Labour’s capitalist darling pushes his luck

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COMMENTARY
It was one of those “near Røkke” experiences that could only enhance the enigma of a man who’s once again been all over the front pages of most Norwegian newspapers for weeks now – for once again allegedly bending rules to suit his own purposes.

Kjell Inge Røkke PHOTO: Aker Solutions

It occurred about 12 years ago. Kjell Inge Røkke, already a media celebrity by that time, had reportedly lost his driver’s license for speeding, according to newspaper accounts, and not for the first time. He was also caught up in huge and controversial business dealings, and playing the role of hot-tempered power broker to a degree that’s unusual in the traditionally cool Norwegian business climate.

Røkke didn’t seem to give a damn. The Molde native who was never a star student had gone on to make a fortune fishing off Alaska. He was busy investing it in venerable old Norwegian industrial concerns, shaking up the markets, and wasn’t inclined to let anyone get in his way.

Back to the “near Røkke” experience. I was out on a lunchtime errand in downtown Oslo, and suddenly Røkke himself darted out of a building, jumped into a large, illegally parked SUV and sped off. Hey, wait a minute, I thought indignantly, he’s not supposed to be driving! He’s lost his license!

As commentators have been noting today as well, years later, Røkke doesn’t always show much regard for rules. He’s been known to break the law and crush small shareholders in his companies, serving jail time for illegally obtaining a boat license after bribing a Swedish maritime official. He’s been in caught in conflicts over everything from fishing rights off Chile to hostile corporate takeovers.

But then comes the paradox: Despite a flashy lifestyle and tough business tactics, the apparent lack of regard for rules and unabashed capitalism, Røkke has endeared himself not only to union leaders but also to socialist politicians. While Prime Minister Jens Stoltenberg of the Labour Party has been on a campaign to fleece the wealthy, most notably retailing tycoon Stein Erik Hagen, Stoltenberg has been among those hailing Røkke as an industry builder. Hagen, like Røkke, is a self-made man who also has created thousands of jobs through his investments.

So why is Røkke loved and not Hagen? Union leaders like Leif Sande and Roar Flåthen note that Røkke has helped keep some traditional industries in Norway and treated workers well. While a self-made shipowner like John Fredriksen also comes from a working class background, only Røkke has paid enough attention to his workers’ representatives. That’s made Røkke a folk hero in Norway, at least among social democrats.

Røkke is also, though, among the social welfare state’s biggest business partners, and now that partnership is under severe strain. In short, Røkke orchestrated a deal to sell five companies in the Aker empire he controls to another Aker subsidiary that he convinced the state to invest in two years ago. Analysts have called the deal “rotten,” claiming the companies are overpriced and only Røkke will benefit. The state, meanwhile, already has suffered billions in losses and claims a shareholder agreement governing internal transactions at Aker was ignored.

The entire spectacle has embarrassed the prime minister and his government, and left the state locked in a power struggle with Røkke. Both sides agreed over the weekend to get a new valuation of the companies involved.

It’s possible Røkke has met his match by angering the state, which is the biggest investor in Norwegian business. Some suggest he’s gone too far this time. He’s kept silent but intended to finally defend the deals publicly on Wednesday.

Opposition politicians note that both sides are desperately trying to save face, and extract themselves from the fray without admitting defeat. It’s possible the conflict won’t be resolved for months, and by then both Aker and the politicians can hope it at least will have faded from the front pages.

RELATED STORY: State strikes back against controversial Aker sales

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(Written April 21, 2009)
Views and News from Norway/Nina Berglund