LEMMINKÄINEN CORPORATION STOCK EXCHANGE BULLETIN 29.9.2009, 15.00
ADDITIONAL INFORMATION ON THE DECISION OF THE SUPREME ADMINISTRATIVE COURT ON
THE ASPHALT MATTER
The Supreme Administrative Court (the SAC) has today ordered a number of
Finnish asphalt industry companies to pay an infringement fine of EUR 82.55
million, of which amount Lemminkäinen is to pay EUR 68 million. The decision
settled finally the Finnish Competition Authority's claim made in 2004 for the
imposition of a competition infringement fine concerning violations of the Act
on Competition Restrictions to seven companies operating in the asphalt
industry during 1994 and 2002.
According to the decision rendered by the SAC, a nation-wide asphalt cartel
existed in Finland between 1994 and 2002 consisting of all the largest players
in the field. Despite the fact that the SAC considered that the cartel was
nation-wide, it notes that the evidence presented by the Finnish Competition
Authority does not cover geographically or temporally all the incidents of the
The Competition Authority proposed a total competition infringement fine of EUR
97 million for the companies in the industry and for the Finnish Asphalt
Association, of which amount Lemminkäinen was to pay EUR 68 million. The Market
Court dismissed the Competition Authority's motion for the most part and
ordered in December 2007 the asphalt companies to pay an infringement fine of
EUR 19.4 million, of which Lemminkäinen was to pay EUR 14 million. (Bulletins on
19 December 2007)
The SAC's decision relates to Lemminkäinen's road-paving operations in Finland,
which accounted for approx. 10% of the Group's total turnover in 2001.
Lemminkäinen acknowledged that the decision rendered by the Market Court had
already shown that the conduct of business by Lemminkäinen in the Finnish
road-surfacing market has, to some extent prior to the year 2002, included
aspects that are in contravention of competition legislation. Lemminkäinen will
not, under any circumstances, approve of the use of illegal procedures in its
operations. Over the years, special efforts have been made within the Group to
intensify training in issues concerning competition law and to provide related
The difference between the infringement fine of EUR 68 million ordered by the
SAC and the infringement fine of EUR 14 million ordered by the Market Court
(EUR 54 million) will be accrued as expense for the third quarter of 2009.
Correspondingly, the company accrued the infringement fine of EUR 14 million
ordered by the Market Court on the results of the fourth quarter of 2007.
Lemminkäinen renews its earlier guidance according to which the Group's
turnover of 2009 will be clearly lower than the level of 2008. As consequence
of the infringement fine imposed by the Supreme Administrative Court, the
company's financial result in 2009 will be clearly negative.
Certain municipalities have announced in the statements of claim submitted to
the District Court of Helsinki that they will claim for damages from
Lemminkäinen and other asphalt companies if the SAC notes that the asphalt
companies have acted in contravention of competition legislation in the areas
of the municipalities. The claims presented in the statements of claim differ
from each other as regards their amounts and grounds. In addition, the Finnish
Road Administration has claimed, relating to the state works, the total of EUR
10.5 million from Lemminkäinen and jointly and severally with other asphalt
companies the total of EUR 5.6 million. At the request of the municipalities
and the Finnish Road Administration, the District Court has so far not
considered the claims, because they were suspended to wait for the decision of
The decision rendered by the SAC shall probably initiate the consideration of
the claims for damages to the extent the Finnish Road Administration and the
municipalities regard that the decision of the SAC provides reason for it.
Lemminkäinen initially considers the claims presented by the municipalities and
the Finnish Road Administration as unfounded. Furthermore, the decision
rendered by the SAC does not concern individual contracts or their pricing.
Claims for damages will be considered separately before the District Court of
Helsinki and heard in the order determined by the court.
Lemminkäinen will communicate on the claims either separately or together,
depending on their contents, in connection with the interim reports.
Thus far, no expense reserves have been made on the statements of claims
submitted to the District Court by the municipalities and the Finnish Road
President & CEO
Further information will be given today after 3 p.m. by President and CEO Timo
Kohtamäki, tel. +358 20 7153 263.
NASDAQ OMX Helsinki Ltd
Lemminkäinen Group operates in all areas of the construction sector. The
Group's business sectors are building construction, infrastructure
construction, technical building services, and building products. Net sales in
2008 were approx. EUR 2.5 billion, of which international operations accounted
for over a quarter. The Group employs about 9,800 people. Lemminkäinen
Corporation's share is quoted on NASDAQ OMX Helsinki Ltd. www.lemminkainen.com