Supreme court judgement in the cassation against the decision of the Latvian Competition Council

With          the 09.08.2021         stock         exchange         announcement
(https://view.news.eu.nasdaq.com/view?id=b27f14eea0dadc5388c582f5ac7a3752d&lang=
en),  AS  Merko  Ehitus  disclosed  information  concerning  the decision of the
Latvian  Competition Council according to which  the group's then subsidiary SIA
Merks  is  considered  one  of  the  nine  companies  involved in the prohibited
cooperation of Latvian construction companies during the period 2015-2019, which
means  a  violation  of  Section  11(1) of  the Latvian Competition Act. Latvian
Competition  Council  does  not  accuse  the  companies in the price-fixing. The
decision   of   the  Competition  Council  was  largely  based  on  conversation
transcripts  that  were  handed  over  by  the Latvian Corruption Prevention and
Combating   Bureau   (KNAB)  which  conducted  wiretapping  during  surveillance
activities.

Prior  to the decision, the company was able  to express its views on the raised
accusations  in  writing  once  and  participate  in  one meeting of the Latvian
Competition Council. SIA Merks and AS Merko Ehitus contested the legality of the
Latvian  Competition Council's  decision in  the Latvian  District Court  due to
manifest  procedural  and  substantive  mistakes,  about  which  AS Merko Ehitus
notified      with      the      09.13.2021 stock      exchange     announcement
(https://view.news.eu.nasdaq.com/view?id=b81cdc6254ddd731f0a9eed6e16f39a0a&lang=
en).  The Latvian District Administrative Court  did not satisfy the appeal, and
therefore  a cassation appeal was filed with  the Supreme Court of Latvia, about
which   we   notified   in   a   stock   exchange  announcement  on  26.02.2024
(https://view.news.eu.nasdaq.com/view?id=1277458&lang=en).  Additional  comments
have  been  published  in  interim  and  annual reports, all materials have been
available           in           the           corresponding          subsection
(https://group.merko.ee/en/investors/latvian-competition-council-proceeding/) of
AS Merko Ehitus' website.

Today,  23 December  2025 the  Supreme  Court  of  Latvia announced its decision
declaring  the use of  information collected through  surveillance activities in
administrative  proceedings inadmissible,  annulled the  decision of the Latvian
District  Administrative Court of  25.02.2024 in its entirety,  and remanded the
case to the Latvian District Administrative Court for retrial.

Merko  Ehitus  group  remains  committed  to  promoting and implementing ethical
business standards and behaviour, as well as compliance with all applicable laws
and  regulations governing business practices. Any possible infringement of fair
competition is in violation of the operating principles and values of the group.

Urmas Somelar
Head of Group Finance
AS Merko Ehitus
+372 650 1250
[email protected] (mailto:[email protected])

AS Merko Ehitus (group.merko.ee (https://group.merko.ee/en/)) group companies
construct buildings and infrastructure and develop real estate. We create a
better living environment and build the future. We operate in Estonia, Latvia,
and Lithuania. As at the end of 2024, the group employed 605 people, and the
group's revenue for 2024 was EUR 539 million.