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Asphalt cartel firms ordered to pay 40m euros in damages

A group of Finnish municipalities have won record damages in a landmark case against eight road-building companies. They were earlier convicted of artificially inflating prices for asphalt work. Helsinki District Court has ordered the firms to pay nearly 40 million euros in damages, the largest financial settlement in Finnish history.

Lemminkäinen will have to fork over most of last year's profit in damages. Image: Yle

Forty Finnish municipalities can look forward to a much-needed cash injection following today's ruling in a long-running case regarding the asphalt business.

Lemminkäinen and seven smaller companies were earlier convicted of forming a price cartel to overcharge local authorities millions of euros for paving work. Four years ago, the Supreme Administrative Court ruled that the companies colluded on prices and other matters between at least 1994 and 2002.

Helsinki District Court has now ordered them to pay the largest damages in Finnish legal history.

State agency complicit

The biggest shocker may have been that the state was denied any recompense. The court ruled that the government-owned road agency Destia knew about the cartel and approved the overcharging.

The 40 municipalities will get an average of a million euros each, but the state won't get a penny.

The payout is big enough to hit the guilty firms where it hurts. The biggest one involved, the construction giant Lemminkäinen, immediately issued a profit warning. It will have to pay the lion's share of the damages: 34 million euros. That's most of the firm's 50 million euro operating profit from last year.

Now it says it expects to end this year well into the red. Just a few weeks ago, Lemminkäinen reported its most profitable quarter ever.

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