Bedrijf moet 2,4 mln euro terugstorten na onroerend-goed transactie met Finse stad Karkkila (en)

The European Commission has decided that a transaction between the city of Karkkila, Finland, and Componenta Corporation violates EC Treaty rules that forbid state aids liable to distort competition within the Single Market (Article 87).

In December 2003 Componenta sold its 50% stake in a real estate company to the city of Karkkila for € 2.4 million, a sum higher than a private investor would have paid. The payment was conditional on Componenta moving some production from Sweden to Finland to create 50-70 new jobs there. The aid distorted competition because it provided Componenta with funds it would not have received under normal market terms. The aid of € 2.4 million was granted without prior Commission approval and must be recovered from Componenta with interest.

"This Commission is firmly committed to tackling distortions of competition where state aid does not contribute to the public good, but merely distorts the Single Market. This is clearly the case when aid is provided to a specific company in order to give it an incentive to invest in one place and close its facilities in another" commented Competition Commissioner Neelie Kroes i.

Componenta Corporation, based in Karkkila in Finland, is a producer of ready-to-install cast, geared and machined components. Componenta has production plants in Sweden, The Netherlands and Finland and employs about 2,200 people.

In 2004, the Commission received a complaint alleging that the city of Karkkila's purchase of Componenta's stake in the real estate company Karkkilan Keskustakiinteistöt Oy constituted state aid (see IP/04/1370). The city already owned the other 50% in the company, which has since been put into liquidation. The complainant also alleged that the hidden subsidy was intended to compensate Componenta for the cost of moving part of its production facilities from Sweden to Finland.