TALLINN - State prosecutors have begun looking into several suspicious real estate transactions at Kalev that may have caused significant financial loss to shareholders of the country's largest chocolate factory.
The investigation was launched in response to a petition last week from Kalev's minority shareholders and the Estonian Investors' Association claiming that two real estate deals carried out by Kalev managers had been detrimental to shareholder value.
"There is no objective reason why both the Keila-Joa properties that belonged to Kalev REC and the present Police House that belonged to Kalev were alienated at what real estate specialists believe was an under-the-market price," the association said in a statement on Oct. 20.
Kalev REC is a subsidiary of Kalev. It came under scrutiny with deals involving the Keila-Joa property and the chocolate factory's previous production complex.
"In the days prior to filing the application, the Investors' Association contacted more than 200 minority shareholders in Kalev, and 90 percent of them found that they were in an information blackout and could find no objective justification to the above deals," the statement continued.
"The action was taken at minority shareholders' request in order to establish whether any violation of the penal code was committed by the deals," the association said.
Commenting on the accusations by the Investors' Association, Kalev has said they are unsubstantiated and empty as Kalev made no loss from the real estate deals but earned a profit. The company also noted that the lower-level Tallinn City Court has already made a ruling concerning the disputed Police House deals stating that no infliction of loss to Kalev or its shareholders was established.
Kalev's management has previously called the investors' association populist.
Kalev's controlling shareholder is Chairman Oliver Kruuda. The company has run into similar charges of shareholder violations in the past.