MERKO EHITUS Ltd. and Toomas Annus provide a summary of the contents of suspicions presented to them along with brief comments of their own.

The Prosecutor's Office, the body conducting the proceedings, and Merko Ehitus
Ltd. have made their best efforts to ensure that the proceedings are carried
out correctly. Owing to the keen interest of the general public, the
speculations spread in the media and the status of MERKO EHITUS Ltd. as a
listed company, MERKO EHITUS Ltd. and Toomas Annus consider it to be their duty
to provide the following clarification via Tallinn Stock Exchange, describing
briefly the contents of the suspicions. 

The following suspicions were presented:

1. Alleged offer of a bribe to Villu Reiljan

a) The alleged offer of a bribe to Villu Reiljan consists in the circumstance
that an apartment was placed in the use of Lea Kiivit, a member of the same
party as Villu Reiljan, free of charge. 

Lea Kiivit wished to buy an apartment at Rävala pst 19-33, Tallinn (67.7 square
metres), at the selling price of EEK 1,624,650, incl. a parking place and
additional construction work. Since Lea Kiivit failed to sign the sale contract
within a reasonable period of time, MERKO EHITUS Ltd. sold the apartment to a
third party. It is alleged that Lea Kiivit bought the same apartment along with
a parking space at the price of EEK 3,176,000 on 11 October 2006. Our opinion
is that the price fully corresponded to the market situation prevailing at that
time. 

b) The allegation according to which it had been promised that Villu Reiljan or
a person appointed by him would obtain a shareholding in a company related to
Toomas Annus, not specified in the suspicion. 

We warrant that to the best of our knowledge Villu Reiljan is not a shareholder
in any of the companies related to Toomas Annus, whether personally or through
any other person. MERKO EHITUS Ltd. only engages its own employees in real
estate projects, doing so within the scope of incentive programmes. 

c) The alleged transfer of the immovable property at Sõpruse pst 178 in Tallinn
to a person designated by Villu Reiljan, while the business interests of OÜ
Woody, a subsidiary of MERKO EHITUS Ltd., were disregarded. 

To the best of our knowledge, Villu Reiljan does not have any personal
interests in this immovable property. Nor has OÜ Woody waived its business
interests. 


2. Alleged bribe to Kalev Kangur

a) We are suspected of selling an apartment furnished for Kalev Kangur at a
price lower than the market price. On 30 December 2003 MERKO EHITUS Ltd. sold
the apartment at Lossi 18/Soone 3 in Tallinn (65.8 square metres) to AS Hansa
Liising Eesti at the price of EEK 1,000,000. The latter had an agreement with
OÜ Sootel as the leaseholder who, in turn, allegedly sold the apartment to
Kalev Kangur on 7 February 2005. 

MERKO EHITUS Ltd. has never sold an apartment to Kalev Kangur and warrants that
it has in no way been involved in any transactions between AS Hansa Liising
Eesti, OÜ Sootel and Kalev Kangur. 

b) We are suspected of having had the intention to transfer the only share in
OÜ KV-TARANTEL to a person designated by Kalev Kangur in autumn 2006. 

We warrant that E.L.L. Kinnisvara AS, the owner of OÜ KV-TARANTEL, has never
discussed or decided upon the sale of OÜ KV-TARANTEL. 


3. Alleged bribe to Ester Tuiksoo

a) Ester Tuiksoo wished to buy an apartment at Rävala pst 19-61, Tallinn (54.7
square metres) along with a parking space and received an offer from MERKO
EHITUS Ltd. to buy the apartment at the price of EEK 1,696,300. Ester Tuiksoo
then abandoned the idea of acquiring the apartment. Toomas Annus is suspected
of having placed the apartment in the use of Ester Tuiksoo free of charge. 

Toomas Annus has not committed the act that he is suspected of.


4. Alleged abuse of trust by Toomas Annus with regard to MERKO EHITUS Ltd.

Toomas Annus is suspected of abuse of trust consisting in that MERKO EHITUS
Ltd. failed to use the opportunity to enter into an allegedly illegal
land-swapping transaction. The allegedly illegal transaction would have enabled
the company to earn additional revenue. 

We find that the directing bodies of a company are competent to decide upon
business risks and related revenue. We are concerned about the approach
inherent in the suspicion as it refers to the capacity of law enforcement
authorities to decide upon the rationality of companies' business decisions
retroactively. 


MERKO EHITUS Ltd. and Toomas Annus hereby confirm that they have not bribed
anyone or offered a bribe to anyone. The content of the suspicions is
incomprehensible to MERKO EHITUS Ltd., Toomas Annus and the Teder, Glikman &
Partners Law Firm. 


Toomas Annus, Chairman of the Supervisory Board of AS Merko Ehitus
Tõnu Toomik, Chairman of the Management Board of AS Merko Ehitus
+372 6 805 105
merko@merko.ee