Tallinna Börs                 NEWS RELEASE                      05/11/2004



COMMENTS ON COMMITTEE'S DECISIONS



TRANSACTIONS WITH ESTIKO SHARES



Brief summary



1. During the course of supervisory proceedings, the Tallinn Stock 

Exchange learned that AS Rondam, the major shareholder of Estiko, has 

acquired a total of 69,187 shares of Estiko by four transactions made 

during different restriction periods.



2. Estiko had repurchased shares from its shareholders for a length of 

time, all of which it sold to Rondam in 2003. Estiko did not inform the 

public of its treasury stock transactions or the transactions with a 

connected person. Neither was the transaction properly recorded in the 

2003 financial reports of Estiko. The Committee further established that 

the treasury stock had been on the balance sheet of Estiko for over two 

years, which is contrary to the provisions of the Commercial Code, but the 

Stock Exchange is not however a competent body to solve this matter.



Decision



For the several above-listed violations, the Committee decided to punish 

Estiko by a total fine of EEK 50,000.



Comment by Tallinn Stock Exchange



The Tallinn Stock Exchange draws the attention of listed companies to the 

restrictions on making transactions by insiders during the restriction 

period.



"The number of transactions made during the restriction period has 

become more frequent recently, which is why we are asking the listed 

companies and insiders to exercise greater diligence than before," said 

Managing Director of the Tallinn Stock Exchange Mr. Jaanus Erlemann.



An exception can be previously applied for if there is a need to make 

transactions during the restriction period. According to Mr. Erlemann, 

Kalev, who was recently granted such an exception, is a good example.



The Tallinn Stock Exchange also draws the attention of listed companies 

to the need for due compliance with the publication obligation both as 

regards the transactions of companies with their own shares and 

particularly transactions with connected persons. Publication of 

information on transactions with connected persons is crucial for the 

transparency of the market.





PUBLICATION OF FINANCIAL RESULTS OF BALTIKA



Brief summary



On 26 September 2003, Baltika published a forecast on H2 2003 results. 

On 27 February 2004, Baltika announced financial results that were 

substantially below the forecast. The profit forecast was not adjusted in 

the meantime.



Decision



The Committee decided to impose a fine of EEK 5000 for the 

aforementioned violations.



Comment by Tallinn Stock Exchange



The Tallinn Stock Exchange reminds the listed companies that upon 

material changes in the published profit forecasts, the company is 

required to inform the investors thereof immediately. The fact itself that 

the forecast was changed is the most important. It may not always be 

possible to publish the scope of the change, because specific figures 

cannot always be forecast immediately.



On the other hand, the Tallinn Stock Exchange would like to encourage 

listed companies to publish information about their visions of the future, 

as TSE sees this as an important criterion for achieving reliability of the 

market and giving the more information for making investment decisions.



"We want to point out Baltika as a positive example to the listed 

companies, as it published its forecasts to the investors and will hopefully 

continue to do so in the future. This is why the Committee decided to 

impose only a symbolic penalty on Baltika," Mr. Erlemann said.





ACTIVITY OF HANSAPANK IN EXECUTING BALTIKA SHARE ORDERS



Brief summary



The financial results of Baltika published on 27 February 2004 were 

substantially below the forecasts previously published. Before publishing 

its results, the order book for Baltika shares contained three purchase 

orders for a total of 2075 shares, entered via Hansapank.



Within five minutes after publication of the stock exchange 

announcement, Hansapank executed these purchase orders at the pre-

announcement price of EUR 1.64-1.68. Within about 50 minutes after the 

announcement, the price of the Baltika share fell to EUR 1.49 (fall of 

11.3%).



According to the Rules, a member of the Stock Exchange has to act 

professionally and diligently, proceeding first and foremost from the 

interests of its clients and the securities market as a whole. The Tallinn 

Stock Exchange studied the behaviour of the Hansapank broker in this 

situation.



Conclusion of Committee



The Committee did not establish a violation, because the Hansapank 

broker followed the provisions of the brokerage agreement with the client. 

The brokerage agreement did not elaborate on the handling of orders in 

the order book upon the publication of important news and the investors 

did not give Hansapank more detailed instructions on how to act in such a 

situation.



Comment by Tallinn Stock Exchange



The Tallinn Stock Exchange draws the attention of investors to the 

potential risks of entering transactions automatically, i.e. without using a 

broker. We also suggest that in order to avoid such situations in the 

future, listed companies should publish important information before the 

beginning or after the end of the trading day, so as to give investors 

sufficient time to read the news and make any adjustments they wish to 

make in their transaction orders.





TRANSACTIONS WITH KALEV SHARES



Brief summary



On 25 March, a transaction of OÜ Mailtec, a company connected with 

Oliver Kruuda, with the shares of Kalev was made at the Estonian Central 

Register of Securities. A restriction period for insiders of Kalev began on 

the same day.



Conclusion of Committee



The Committee established that OÜ Mailtec made a contract for selling the 

shares on 19 March and gave the relevant transaction instructions to the 

bank on 22 March 2004. The transaction was effected in the Estonian 

Central Register of Securities on the third day or the value date (T+3) as 

in line with the TSE Rules, i.e. 29 March 2004. Therefore, the Committee 

established that the transactions made by insider with the company’s 

shares were not made during the restriction period.





Further information:



Eva Palu

Communications Manager

Tallinn Stock Exchange

+372 640 8862





Tallinn Stock Exchange

Market Services

640 8802