Merko Ehitus AS and three of its subsidiaries were ordered to pay fines totaling 800,000 euros ($1.1 million) by an Estonian court for offering bribes to an official of the Tallinn City government.
Harju County Court fined Merko Ehitus, the biggest listed Baltic builder, 300,000 euros; the company’s OU Constancia and OU Woody subsidiaries were fined 200,000 euros each and its OU Metsailu unit 100,000 euros, the court said in an e-mailed statement today. Merko, in a regulatory statement, denied paying bribes and said it plans to appeal the verdict.
The stock was down 1.5 percent, at 6.05 euros, at 12:54 p.m. in Tallinn, the lowest level in two weeks. Merko has gained 11 percent this year, compared with an average 15 percent gain by its Eastern European Industrials peers, according to data compiled by Bloomberg.
The court found Ivo Parbus, a former adviser to Tallinn municipality, guilty of soliciting and accepting large bribes on multiple accounts. He was sentenced to two and a half years in prison. Tonu Korts, a former management board member of Merko Ehitus, was sentenced to two years and three months in prison, of which 22 months are conditional, for giving multiple bribes. Five other individuals also received jail sentences.
Parbus had taken a total of more than 980,000 krooni ($83,500) in money and gift vouchers to arrange detailed plans and speed up the issuance of construction permits between May and December of 2008, according to the indictment.