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Finnish police have withdrawn a request to arrest former Sonera boss Kaj-Erik Relander on suspicion of complicity in an escalating phone tracing scandal involving the telecoms carrier.

Finland's National Bureau of Investigation (NBI) yesterday withdrew court proceedings at Helsinki District Court that would have led to the arrest of Relander for suspicion of gross violation of customer secrecy between 2000 and 2001. Relander, chief executive at Sonera during that time, now works for venture capital firm Accel Partners in London.

"The demand for an arrest warrant has been withdrawn but the investigation into him and others goes on," senior NBI officer Markku Ranta-Aho told Reuters yesterday.

Police are investigating claims that Sonera staff riffled through private telephone records (of Sonera staffers and outsiders) in an attempt to identify an internal mole. The investigation follows October reports in Finnish national newspaper Helsingin Sanomat that staff at the company had retrieved individuals' telephone records in order to finger a mole who leaked details of a dispute involving Sonera's senior managers to the paper.

Five Sonera staffers, including three senior executives, have already been arrested in connection with the investigation. Charges have yet to be formerly made, but violations of Finland's communications secrecy laws carry a maximum sentence of three years in prison.

Last Friday, police arrested Jari Jaakkola, executive vice president of corporate communications and investor relations, Reuters reports.

This follows the arrest of Henri Harmia, who was in charge of managing Sonera's merger with Telia, and Juha Miettinen, the head of the firm's corporate security unit.

Helsinki District Court is expected to rule later this week on whether to keep the Sonera employees under arrest.

Sonera $6.4bn acquisition of Telia is not expected to be affected by the case.

Government data retention scheme under fire

The controversy surrounding the case has galvinised calls from privacy campaigners for the Finnish government to change its position on compulsory data retention in telecommunications.

Electronic Frontier Finland (EFFI) notes the irony of its government lending support to controversial EU data retention proposals while senior executives at the country's largest telco are under criminal investigation for suspected serious traffic data misuses. Finland demands that all telecommunications traffic data inside the EU should be retained for two years, taking a tougher stance on the measures than even the Blair administration.

A statement by EFFI explaining its concerns can be found here. ®

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