AS Kalev                 Stock Exchange Release                20.10.2005  





Investors Association sheds bad light on AS Kalev 



The articles published in the Äripäev daily on 19 Oct 2005, ”Investor group wants 

to press charges on Kalev deals” and ”Small shareholders must be considered,” have 

cast an unjustifiably bad light on AS Kalev, harming the firm’s reputation in the 

eyes of the public.



The head of AS Kalev’s legal department, Allan Viirma, says it is not clear what 

the actual goal of the actions taken against AS Kalev by the Investors Association 

is. ”The accusations of the Investors Association are not based on any document or 

report, but are merely speculations published in a newspaper,” said Allan Viirma. 

He says such irresponsible actions on the part of the association are more likely 

to harm than protect the interests of shareholders. It needs to be emphasized 

that AS Kalev does not act in the interests of the Investors Association, but in 

those of its shareholders.



”The claim made in the article that the sale of a legal share of the real estate 

located at Pärnu mnt 139 in 2003 was a transaction that hurt the business interests 

of AS Kalev, is not justified. The claim that the actual value of the legal share 

of the real estate and the actual value of the building is much higher than agreed in 

the sales contract, has not been proven and is just empty words,“ said Allan Viirma. 

On the contrary, the correctness of the price has been established by the opinion 

of certified experts.  The claim that the ordinary sales price is equal to 10-year 

lease payments is devoid of legal meaning due to the fact alone that the objects, 

objectives and terms and conditions of the transactions under comparison are 

different.



Representing AS Kalev, attorney-at-law Leon Glikman said that this issue involves 

disputes that have long since been settled. The sale of a legal share of the real estate 

at Pärnu mnt 139 was disputed in 2003 by a minority AS Kalev shareholder, who brought 

two suits in Tallinn City Court. The proceedings were ended due to the cases being 

dismissed, with the court ordering that court costs be paid for AS Kalev.



The assessment provided in the same article to the sale of the registered immovables

at the Keila-Joa recreational area, allegedly for below market price, is arbitrary 

and once again, based only on speculative journalism. Attorney Leon Glikman emphasizes 

that the listed company was not a party to the transaction, which is why interest toward 

a contract based on private autonomy is incomprehensible. The property of AS Kalev is 

not being alienated in this case. The plots sold at the Keila-Joa recreational complex 

all have different values, as determined by the size, location, buildings, historical 

preservation requirements and so on. All of the plots were sold to the buyers for fair 

prices. In retrospect it is clear that AS Kalev Real Estate Company had the most 

realistic assessment of the market situation when it made its bid at auction: as of today, 

the company has sold the 69 million kroons worth of registered immovables at Keila-Joa, 

earning a profit of 17 million kroons.



It is also important to mention the fact that in accordance with clause 9.4 of the agreement 

between shareholders concluded on 3 May 2002 between AS Kalev REC shareholders AS Kalev and 

AS Skanska EMV, the parties agreed not to begin development projects whose projected rate 

of return is under 14% or whose projected cash flow might be negative. This was also 

a condition in the case of the Keila-Joa recreational area development project. 





Ruth Roht

PR manager

+372 6 077 858