The linchpin in the whole Alevo saga, Jostein Eikeland was the key driving force in so much that happened. Segments related to him will be linked to from this page as we unravel the elements that we think he would rather not have published in a comprehensive manner.
Jostein is particularly careful about nurturing his image as a visionary entrepreneur, despite the fact that almost all the ventures which he has participated in in a key management or board position in the past 20 years appear to have gone bankrupt, often with severe questions as to where the money has ended up?
Over the years Jostein must have had his companies spend a great deal of money on public relations. At Alevo at least two key people fulfilled that role. Julian Tanner was key during the Alevo launch event in 2014, and Scott Schotter, Jostein’s friend of 20 years, spent much time and resources helping to ensure that the image was kept clean despite so many negative newspaper articles and references to Jostein. Indeed, when a new board was composed in 2016, Jostein even made sure to include someone loyal and well versed in PR, namely Eric Cameron.
Jostein’s personal site at josteineikeland.com appears offline as of January 2020. In 2016 for instance it espoused his “green” credentials.
In December 2014 alevo.com described Jostein as:
An internationally renowned visionary in the computer and manufacturing industries, Jostein Eikeland co-founded Telecomputing AS, the world’s first cloud computing company, in 1997. After leading Telecomputing to a public offering on the Oslo Exchange in 2000, he orchestrated a 2006 leveraged buyout of Meridian Technologies, Inc., a full-service supplier of innovative magnesium die casting components and assemblies. Under his leadership, Meridian was the world´s largest producer of magnesium components. He attended Merchant Marine School as well as studies in Electrical Engineering.
The description given does not mention for instance Tønsberg Magnesium Group (TMGI) which was a publicly listed company which went spectacularly bankrupt in 2008 with a lot of money missing. Alevo is not the first time that Jostein Eikeland has been involved in ventures that have raised substantial amounts of capital from third party investors who have then witnessed a total collapse of the venture. Nor is it the first time that serious questions have been raised about the misappropriation of shareholder assets by Mr Eikeland before a bankruptcy.
On 19 August 2016 the Norwegian Business Daily, Dagens Næringsliv, published a long article on Alevo and Mr Eikeland and the numerous creditors pursuing him. A section from that article (available in English at https://www.scribd.com/document/348261773/The-Serial-Billionaire) states:
In May 2008, the TMGI went bankrupt with over 300 million in uncovered liabilities. Eikeland had still got money out of TMGI for the purchase of “technical rights”, and shares in a Polish company, according to the liquidators. The Swedish trustee Claes Göran Westerberg found that SEK 46 million was paid to Eikeland company in Switzerland, Estatia AG, prior to the bankruptcy.
– It may be noted that the company did not get any visible quid pro quo for these payments, writes trustee Westerberg in his statement. The transfers were made by CEO Petter Wessel Bjørnstad, behind the back of the board TMGI.
– The money was paid by me on instructions from the company’s chairman Jostein Eikeland. Such offsets were shares NTP, says Bjørnstad.
Nevertheless: Soon also Eikeland’s company Estatia AG went bankrupt. The Swedish Carnegie Investment Bank went bankrupt in the wake of TMGI collapse. Partly as a result of the loss of hundreds of million that was lent to TMGI.
There are many ways money can be syphoned off from a company. Some can be obvious, and some very subtle. Some may have the express approval or consent of a group of stakeholders, and others may be perpetrated by individuals, or groups of individuals, acting in their own self-interest, believing that they will not be caught, or that others will not suffer in any event.
TMGI was also investigated for possible share price manipulation as well as reviewed by the Swedish Finance Inspectorate for Mr Eikeland’s share deals after the disclosure of extensive options deals and targeted share issues to persons in management and the board.
Under Mr Eikeland’s Chairmanship, Corporate Governance at Alevo was of such a poor standard that AGMs for 2013, 2014 & 2015 were not even held before December 2015. An AGM is the ultimate body that oversees how a company is run and which can make decisions and elect the Board. The Directors during that period apparently did not see fit to organize such a meeting where their actions might be scrutinised, and where they would be expected to be accountable for the actions they had taken. However Jostein was able to organize a great launch event in October 2014.
This gave the Chairman a neat opportunity to engage many of his unqualified confidants to key positions within the Alevo organisation with elevated compensation packages considering that the business was not generating any revenue. Included in management are names that this site presents information on.
The accounts of Alevo lacked details as to related party transactions, which have since been shown to include US$ 14 million of commissions to Clydemont Finance, a British Virgin Islands (BVI) company owned by Mr Eikeland.
Jostein was selling many of his personal shares (or those of Clydemont) to outside investors therefore netting off lots of money to his offshore company and himself, and then using the other money that was raised for the company to pay excessive salaries to his executives who couldn’t deliver on the plans that were used to “sell” the business to investors.