Tallinna Börs                 NEWS RELEASE                      09/12/2003



COMMENT TO COMMITTEE'S DECISION



As a comment to the decision made by the Tallinn Stock Exchange (TSE) Listing 

and Surveillance Committee, Tallinn Stock Exchange finds it necessary to say 

(note) the following:



TSE initiated the surveillance proceedings to investigate the circumstances 

described in the request submitted by AS Milestone.



AS Milestone has indicated several moments in Kalev's activities, that, by 

the applicants judgement, were not in accordance with the Estonian 

legislation, TSE Rules or the interests of shareholders.



To TSE's knowledge, AS Milestone has made a request to the Financial 

Supervision Authority to investigate Kalev's activities. AS Milestone has 

also filed a claim to the Tallinn city court.



The circumstances described in AS Milestones request, fall into three 

categories: non-accordance of company's activities with the requirements of 

information disclosure, as set forth in TSE Rules; business transactions that 

were allegedly harmful to the company, and failure to make the mandatory 

take-over bid by a major shareholder.



According to the legislation, evaluation of expediency of listed companies 

business transactions, nor the control over take-over bids it is not in the 

TSE's jurisdiction. Because of this the committee has only made a decision in

reference to violation of the information disclosure requirements by AS Kalev.



Pursuant to the legislation and TSE Regulations, TSE's supervision over the 

listed companies is mostly limited to inspection and implementation of the 

information disclosure requirements. The goal of surveillance is to ensure 

that market participants are fully and precisely informed about all 

circumstances, that may affect the price of securities.



The claims asserted to members of the management board about business 

transactions harmful to the company, will be decided by shareholders’ general 

meeting or supervisory board meeting. It means that the control, whether the 

actions of the management board have been efficient or not, is in 

jurisdiction of shareholders’ general meeting or supervisory board. If the 

shareholders’ general meeting or supervisory board finds that the actions of 

management board have caused economic damage to the company, it has the right 

to appeal to court.   



Since September 1, 2002, the supervision over the violations of the mandatory 

take-over bid process is carried out by the Financial Supervision Authority.





Tallinn Stock Exchange

Management Board

+372 640 8802