(Made in accordance with Article 3 (6) of the Statute of the European Ombudsman(1))

THE COMPLAINT

In 1989, Preussag AG (now "TUI AG") acquired Salzgitter AG(2), a state-owned company, for DM 2 452 billion. According to the complainant, a former member of the management board of Preussag AG, the value of Salzgitter AG's property had been estimated to be worth DM 454.2 million at the time of its acquisition. In the complainant's view, the insurance value of this property amounted to DM 10.2 billion. According to the complainant, the liquid assets of Salzgitter AG covered the purchase price at the time. In the complainant's view, Preussag AG thus effectively acquired Salzgitter AG “for free” and received illegal state aids amounting to EUR 7.5 billion. The complainant stressed that it had been agreed at the time of the sale that the purchaser should not sell more than 2 500 of the flats it acquired but that this limit had not been respected.

In 1998, the Directorate-General for Competition of the European Commission ("DG Competition") asked the German government for information regarding this sale in order to be able to determine whether state aids had been involved. According to the complainant, the reply given by the German government on 17 July 1998 had been prepared by Preussag AG. In the complainant's view, this reply was in clear contradiction with the contents of the privatisation contract and the budgetary provisions applicable in Germany and thus deliberately incorrect.

On 6 December 2003, the complainant wrote to DG Competition in order to ask it to intervene in relation to the state aid that had, in his view, been granted to Preussag AG. The complainant pointed out that Preussag AG had in the meantime sold a substantial number of flats, which he considered to be in breach of the terms of the privatisation agreement. He submitted that the proceeds from this sale had been used (as from 1996/1997) to offset the operational losses in Preussag AG's core activities and to help finance the acquisition of certain companies in the tourism sector, thus massively affecting competition in this area. The complainant also argued that accounts had been falsified, that auditors as well as members of the managing and the supervisory boards had been bribed, that politicians and managers had been blackmailed and that other crimes had been committed. According to the complainant, the German judicial system found it hard to deal with the matter since high-ranking German politicians and managers were involved.

The complainant submitted that the illegal state aid should be repaid and that the property concerned should be returned to its previous owner. He also called on the Commission to open criminal proceedings at the EU level and in particular to examine the role played by WestLB AG, the major shareholder of Preussag AG/TUI AG.

In its reply of 18 February 2004, DG Competition pointed out that it had already examined the sale of Salzgitter AG, in particular as regards the sale of the property, with a view to finding out whether it was compatible with the state aids provisions of the EC Treaty. According to the Commission, this examination had shown that there were no indications of an illegal state aid. The Commission expressed the view that the complainant's letter of December 2003 contained no new elements that would justify a different interpretation of the relevant facts. It added that on the basis of the complainant's letter there was nothing to suggest that the German government had provided false information to the Commission as regards the sale of Salzgitter AG. The Commission concluded by pointing out that it was not in a position to deal with the alleged criminal acts referred to by the complainant which would fall under the competence of national courts.

In his complaint to the Ombudsman submitted in March 2004, the complainant alleged that DG Competition had failed to consider his letter of 6 December 2003 with the requisite care. He claimed that the Commission should carry out an appropriate examination.

On 27 April 2004, the complainant forwarded to the Ombudsman copies of (1) the letter addressed to the Commission by the German government on 17 July 1998 and (2) an agreement concluded between Preussag AG and Salzgitter AG on 25 September 1990.

THE INQUIRY

The Commission's opinion

A copy of the complaint and the letter of 27 April 2004 were forwarded to the Commission for its opinion.

In its opinion, the Commission made the following comments:

The Commission had already, following another complaint submitted in 1998, assessed the sale of Salzgitter AG, in particular the sale of the property, with regard to its compatibility with Community law on state aids. This assessment had led to the conclusion that there seemed to be no indication of illegal state aid at the time of the privatisation and that intervention by the Commission was therefore not justified.

In his letter of 6 December 2003, the complainant had alleged that the information that had been provided by the German authorities in their letter of 17 July 1998 had been incorrect and that the Commission should initiate an official investigation. He had submitted (1) that the information in the letter of 17 July 1998 had been provided by the German authorities in close cooperation with Preussag AG and (2) that this information was in contradiction with the content of the privatisation agreement concluded in 1989 and with German federal budgetary legislation.

The Commission's assessment of the issues raised in 1998 had indeed been based on the information provided by the German authorities. However, the Commission had not relied solely on the letter of 17 July 1998 but had also considered a number of supporting documents (such as the privatisation contract of 1989 and the evaluation report prepared at the time for the purposes of determining the purchase price by "Treuarbeit", the auditing firm retained for that purpose), as well as additional information provided by Germany in September 1998, following a second request for information from the Commission.

As regards the argument that the information provided in the letter of 17 July 1998 was in contradiction with the content of the privatisation agreement concluded in 1989 and with German federal budgetary legislation, the complainant had not submitted a more detailed explanation of the precise nature of what he saw as a contradiction. Furthermore, these were internal issues that should be dealt with by national courts.

The complainant had sent to the Commission a transcript of the proceedings he was currently pursuing before the courts in Germany and in which he was claiming that the German authorities had intentionally provided DG Competition with incorrect information. It appeared, however, that these proceedings had not yet resulted in a judgment.

Since the complainant had not provided any new information on the issue of the allegedly illegal state aid nor proper evidence for his allegations that the information provided by the German authorities was incorrect, it had not been possible at that stage to do otherwise than to follow the initial assessment of 1998.

However, the Commission was always prepared to consider any conclusions of the national courts that could have an influence on the issues raised by the complainant or any other new arguments, provided the complainant was able to submit sufficient explanations and evidence for such arguments.

The complainants’ observations

In his observations, the complainant maintained his complaint and submitted further documents, including excerpts from the evaluation that the auditing firm "Treuarbeit" had carried out at the time for the purposes of determining the purchase price. The complainant submitted that the insurance value of the relevant houses (amounting to around DM 10.2 billion) did not even reflect the value of the land as such, which could be estimated at 25 % of the insurance value or another DM 2.5 billion.

According to the complainant, the estimated value of Salzgitter AG of DM 2.442 billion had been the sum of the value of the companies belonging to the group (DM 1 987.8 million) and of the value of the property (DM 454.2 million). The relevant price had thus in his view been paid with the liquid assets of Salzgitter AG that the evaluators had 'forgotten' to evaluate.

The complainant accepted that a Member State's reply to a request for information from the Commission could be prepared by the company concerned. He added, however, that in such a case the national authorities were under an obligation to check this reply particularly carefully before passing it on to the Commission. According to the complainant, the German authorities had failed to do so in the present case and had thus factually lied to the Commission.

The complainant submitted an article published in a German newspaper in April 2000. According to this article, Preussag AG had paid for trips to the Olympic Games in the USA that two managers of the firm evaluating Preussag AG's accounts (including one who had dealt with the evaluation of Salzgitter AG at the time of its privatisation) and their wives had made in 1996.

On 17 August 2004, the complainant forwarded to the Ombudsman a copy of a letter he had addressed to the Minister of Justice of the Land of Lower Saxony on 13 August 2004. In this letter, the complainant alleged, inter alia, that Preussag AG/TUI AG had bribed officials and politicians.

Further inquiries

After careful consideration of the Commission's opinion and the complainant's observations, it appeared that further inquiries were necessary.

The first request for further information

On 24 September 2004, the Ombudsman therefore asked the Commission for further information in relation to this case. The Ombudsman noted that in the complainant's view, there was a serious discrepancy between what he perceived to be the real value of the property concerned (at least DM 10.2 billion) and the assessment of the property that had been the basis of the privatisation agreement (DM 454.2 million). He therefore asked the Commission to explain how it had nevertheless arrived at the conclusion that there seemed to be no indication of illegal state aid and that intervention by the Commission was therefore not justified.

The Commission's reply

In its reply, the Commission made the following observations:

As regards the relevant facts

Salzgitter AG had been sold by the German government to Preussag AG for DM 2.45 billion in 1989. The price had been determined by an expert report prepared by the auditing firm "Treuarbeit", which had based its evaluation on the actual value of the future revenues of the company. In addition, Germany had compared the result of the evaluation with the data of a comparable company, Hoesch AG. This had allowed Germany to establish a price for Salzgitter AG ranging from DM 2.4 to 2.5 billion.

As regards the evaluation of the non-commercial property, the total price agreed for these immovable assets had been around DM 440 million. The assessment of the auditing firm "Treuarbeit" had been based on information provided by Salzgitter AG, according to which the largest part of the flats belonging to Salzgitter Wohnungs-AG ("WAG") and Kieler Werkswohnungen GmbH ("KWW") was not marketable and could not be sold, mainly because around half of the housing in question was rented to employees and pensioners of the group. The evaluation of these allegedly non-marketable flats had been based on the actualised rent payments. "Treuarbeit" had added that it would not be possible to sell more than 2 500 flats owned by WAG and KWW at an average price of DM 50 000 per unit in the course of the following ten years. Given that the precise evaluation had been considered confidential by Germany at the time when this information had been provided to the Commission, the Ombudsman was invited to inspect the details of this evaluation in the Commission's file.

The privatisation agreement had included a protection clause which should have limited the possibility of a free sale of more than 2 500 flats over 10 years to a situation in which this became necessary from an economic point of view due to a change of circumstances and where doing so was compatible with the social responsibility of the group. However, until 1998, WAG and KWW had sold more than 2 500 (of their holding of about 28 000) flats.

As to the Commission's assessment

Concerning the general method of evaluation used by the auditing firm "Treuarbeit", the Commission's services had come to the conclusion that it corresponded to the method commonly used in this field at the time. Although the hypothesis on the basis of which the evaluation had been done could always be discussed, it had been concluded that at that time it had been a choice which did not have an abnormal character.

The Commission had asked Germany to comment on the information published in a German newspaper in 1991, according to which the insurance value of the property in question was around DM 10.2 billion. This insurance value was much higher than the purchase price. The German authorities had explained that the relevant article misinterpreted the information which, in fact, related to the insurance value of the property of the whole Preussag group in 1989/90. A document supplied by the complainant (annex 4 of his observations) seemed to confirm this. According to the German authorities, the insurance value of Salzgitter AG's property alone had been significantly lower. Germany had further explained that the value of a property for insurance purposes was determined differently from the market value of such a property, namely on the basis of how much it would cost to rebuild the property anew. The Ombudsman was invited to inspect the Commission's file for more detailed information regarding the actual insurance value and its calculation, which were considered confidential by Germany.

The Commission's services had therefore come to the conclusion that the hypothesis used by the auditing firm "Treuarbeit" at that time appeared reasonable, that there was no proof of an undervaluation and that it did not therefore seem possible to assume the existence of state aid in this context.

As regards the claim of a breach of the protection clause in the privatisation contract due to the sale of more than 2 500 flats, the German authorities had presented arguments to show that the sales had been conducted in line with the conditions of that clause. In any event, the Commission's services had concluded that they would not have the competence to act, under the pretext of state aid, in a dispute regarding the interpretation of the clauses of the privatisation agreement and that any possible litigation had to be subject to national law.

Conclusion

It followed from the above comments that a position on the compatibility of the above case with the provisions of EU law on state aids had been established on the basis of a detailed analysis. The Commission was therefore of the opinion that the case at stake had been treated by its services in an appropriate way.

However, the Commission was always prepared to consider any new arguments, provided the complainant was able to submit sufficient explanations and evidence for such arguments.

The complainant's observations

In his observations, the complainant maintained his complaint. He reiterated his view that the Commission had relied on the information provided by the German authorities. According to the complainant, however, these authorities had deliberately misinformed the Commission.

In order to support this view, the complainant submitted excerpts from what appeared to be the minutes (or a draft of the minutes) of the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony that was held on 28 November 1998.

According to these minutes, Mr E., a member of the Parliament, had stated at the meeting that the price set for the privatisation of Salzgitter AG in 1989 "which had subsequently been paid from the reserves of Salzgitter AG, was a political price, i.e., it was not a market price". Mr E. had further stated that the federal government had declared at the time that in order to maintain Peine and Salzgitter as an industrial site, Salzgitter AG should not be sold to a competitor from the Rhine or Ruhr region and that "the price and the procedure should be set in such a way as to ensure that a company from Lower Saxony should remain a company from Lower Saxony". According to Mr E., this had suited Preussag AG perfectly well at the time "because the company had been in a difficult period". Mr E. had added that "the purchase price had then been kept very low for political reasons; and now this present was to be made into money for other purposes. The responsibility that Preussag AG also took over at the time is no longer being respected." In his reply, Mr T., then secretary of state in Lower Saxony, had made the following comment: "What you have said just now is what I had tried to formulate in a very cautious and diplomatic way in my opening statement."

The complainant submitted that a 'real' purchase of the company that had been worth around DM 15 billion (DM 10.2 billion for property, DM 2 billion for participation in other companies and DM 2.5 billion in cash) by Preussag AG would have been impossible in 1989. He added that, in order to save Preussag AG from bankruptcy, all the state property had therefore been transferred to Preussag AG and only the cash had been taken out of the company. In the complainant's view, Preussag AG had, as a consequence, obtained possession of Salzgitter's assets amounting to DM 12.5 billion (15 - 2.5 billion) without having had to pay a 'real' price. The complainant submitted that Salzgitter had not been sold but basically been presented as a gift.

The complainant further produced an offer for one of the flats concerned that was issued in February 1991. The price quoted for this flat (of around 65 m 2) amounted to DM 71 700. The complainant submitted that the average price of the flats sold by the state in 1989 had amounted to DM 13 400 and that the above-mentioned small flat had already been five times more expensive. He therefore assumed that the relevant flats had been worth around DM 3 to 4 billion.

The second request for further information

On 20 January 2005, the Ombudsman again asked the Commission for further information in relation to this case. In his letter, the Ombudsman requested the Commissio n (1) to comment on the further information provided by the complainant and (2) to address the complainant's argument that the purchase price that Preussag AG had to pay for Salzgitter AG in 1989/90 had been financed from the liquid assets of Salzgitter AG that the auditing firm "Treuarbeit" had 'forgotten' to evaluate.

The Commission's reply

In its reply, the Commission made the following observations:

The complainant did not provide any evidence to show that the purchase price had been financed from the reserves/liquid funds of Salzgitter AG. The statement made by Mr E. could not be regarded as proper evidence, since it was a mere allegation.

Even if the sale had been partly funded by the reserves/liquid funds of Salzgitter AG, this did not mean that the latter had not been sold at a market price and that there had thus been state aid involved in the transfer. Other items and factors influenced the value of a company and this had to be taken into account when establishing the market price. These items could increase the value of a company but could also reduce its value (for example debts). A comprehensive analysis thus needed to be carried out to assess whether a market price had been paid.

The price of Salzgitter AG had been determined by an expert report prepared by the auditing firm "Treuarbeit", which had based its evaluation on the actualised value of the future revenues of the company. This was a common method to establish the market value of a company. "Treuarbeit" had also not forgotten to evaluate the liquid assets of Salzgitter AG as claimed by the complainant. The expert report explicitly stated that liquid funds that were not used for reinvestment in future periods were considered to bear interest at the market rate and as such to generate future interest revenue. The future interest revenue had been included in the total future revenues and had increased the market value of the company.

The complainant's unsupported allegation that the purchase price had been financed by the reserves/liquid funds of Salzgitter AG did not thus alter the Commission's assessment of the case.

As regards the price referred to by the complainant, a sale price of DM 71 000 for a flat could well be considered to be in the range of prices evaluated by the auditing firm "Treuarbeit", given that the latter had evaluated the average sales price per unit to be DM 50 000.

The complainant's observations of 12 April 2005

In a letter of 12 April 2005, the complainant sent what he referred to as his preliminary observations on the Commission's reply.

In these observations, the complainant maintained his complaint. He reiterated his view that the Commission was relying on incorrect information that had been provided by the German authorities. The complainant stressed that it would be fairly easy for the Commission to ascertain the veracity of his allegations by inspecting the contracts between Preussag AG and Salzgitter AG as well as the relevant accounts, in which the origin and the sale of the property were recorded. In the complainant's view, this was not an internal German issue, given that the transfer of the property constituted illegal state aid.

The complainant submitted that the Commission's position amounted to a refusal to comply with its duties. He suggested that the Ombudsman should immediately inform the European Parliament thereof.

The complainant further stressed that the committee to which he had referred was a constitutional institution and that the statements that were made and recorded at the meetings of such a committee had, from a purely legal point of view, to be in conformity with the truth. When a member of the Parliament submitted a question to such a committee, together with a description of the background of this question, and if the secretary of state gave a reply to this question which was recorded in the minutes, one could not speak of a "mere allegation".

As regards further factors to be taken into account that could decrease the purchase price, the complainant took the view that the Commission had not at all shown that such factors had been present and to what extent they could be relevant for determining the actual purchase price. The complainant further stressed that the relevant report had been drawn up by the auditing firm "Treuarbeit" which had examined the accounts of Salzgitter AG and Preussag AG for many years both before and after the sale. According to the complainant, it could be shown that this company had been bribed by Preussag AG. The complainant queried what value a report produced by such a company could have.

The complainant further stressed that liquid funds did not need to be evaluated but had to be included, at their full value, in the purchase price. In his view, the Commission's arguments regarding this aspect of the case were patently wrong. The complainant stressed that EUR 100 was and remained EUR 100. He added that if the Commission should not share this view, he would be happy to enter into deals under which the Commission would provide him with repeated payments of EUR 100 for which he would pay the "market value" of the "total future revenues", the market value being calculated according to the logic applied by the auditing firm "Treuarbeit".

The complainant further stressed that the Commission had argued that the major part of the flats were non-marketable. According to him, however, nearly all these flats had now been sold. The complainant therefore queried how the Commission had arrived at its conclusion which, in his view, was completely untenable.

As regards procedural aspects, the complainant expressed surprise at the fact that the Commission's reply was dated 1 April 2005. He also noted that he was astonished at the fact that the Ombudsman had forwarded the reply without any comments, thus giving the impression that the matter would be closed unless he corrected the wrong statements that he considered that the Commission had made.

The Ombudsman's reply

By letter of 29 April 2005, the Ombudsman replied to the complainant's queries regarding the procedure. The Ombudsman informed the complainant that the Commission's reply had been requested for 28 February 2005, that the Commission had informed the Ombudsman's Office on 3 March 2005 that the reply would be sent within the following few days and that the English version of the reply (dated 16 March 2005) had been sent to the Ombudsman's Office on 23 March 2005 whereas the translation into German (the language of the case) had only arrived on 1 April 2005. In this context, the Ombudsman reminded the complainant that he had already been informed in the Ombudsman's opening letter that the need to obtain translations could cause a certain delay. The Ombudsman further informed the complainant that he does not form a final view on a complaint without having given the complainant the possibility to make observations and that the fact that the Commission's reply was forwarded to him without comments was therefore in accordance with the Ombudsman's standard practice. The Ombudsman added that, obviously, this fact did not signify that he considered the Commission's views as having already been established.

The complainant's observations of 15 May 2005

In a letter of 15 May 2005, the complainant sent further observations on the Commission's reply. The complainant in particular submitted a table in order to show that Salzgitter had had liquid funds amounting to DM 2 421. 3 million at the time of its purchase by Preussag AG.

The third request for further information

On 30 May 2005, the Ombudsman again asked the Commission for further information in relation to this case.

In his letter, the Ombudsman noted that, as regards the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony, which was held on 28 November 1998, the Commission considered that the statement of Mr E. constituted a mere allegation. The Ombudsman pointed out, however, that Mr T. (the representative of the government at that meeting) seemed to have agreed with Mr E.'s statement. He therefore asked the Commission to inform him whether it had taken any steps to clarify the matter, for example by asking for an explanation from the German authorities. The Ombudsman further noted that, according to the Commission's reply to the second request for further information, the expert report had explicitly stated that liquid funds that were not used for reinvestment in future periods had been considered to bear interest at the market rate and as such to generate future interest revenue. The future interest revenue was included in the total future revenues and increased the market value of the company. The Ombudsman asked the Commission to specify, in the light of the comments that the complainant had made in this respect, why it considered that this way of evaluating the liquid funds was appropriate.

The complainant's letter of 24 June 2005

In a letter of 24 June 2005, the complainant pointed out that he intended to forward information on the whole case to the UK Presidency of the Council of the European Union, given that in 2000 Preussag AG/TUI AG had purchased a British company, using the money that had it had received as a gift from the German government. The complainant further repeated his argument that Preussag AG/TUI AG had bribed politicians and members of the judiciary in Germany.

The Commission's reply

In its reply to the Ombudsman's third request for further information, the Commission made the following observations:

The Ombudsman's questions concerned new issues that the complainant had not raised at the time when he had complained to DG Competition. These issues were therefore of no relevance for the question as to whether the Commission had dealt appropriately with the complaint that it had received from the complainant.

The Commission had not taken any steps to clarify the statements made by Mr E. and Mr T. in the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony. It should also be stressed that the Commission had based its assessment on information that it had officially received from the German federal government and that it had to rely on the accuracy of this information unless there was a strong indication that the information provided was incorrect.

As regards the statement of the expert report that liquid funds that were not used for reinvestment in future periods had been considered to bear interest at the market rates, this only concerned the estimation of the value of Salzgitter AG from 1987/88 to 1988/89. Originally, the auditing firm "Treuarbeit" had been supposed to value the company for the end of the accounting year 1987/88. However, as the sale of Salzgitter AG had been delayed, an estimation of the value to the end of the accounting year 1988/89 had been necessary. The Commission considered the approach adopted by "Treuarbeit" in this context as appropriate.

As regards the cash available in the company, it should again be pointed out that the evaluation of the value of Salzgitter AG had been based on the so-called discounted cash flow analysis ("DCF analysis"). In the context of such an analysis, the net asset value of a company was only of minor importance. The fact that a certain amount of cash was available in a company did not allow the conclusion that it would be available for disbursement. Consequently, when establishing the value of a company on the basis of a DCF analysis, the value of a company could not automatically be increased by the amount of cash available in a company.

As regards the question of cash used for reinvestment, it was important to note that the DCF analysis only takes into account the free cash flow which can be disbursed without weakening the future profitability of the company. It was therefore consistent with this methodology that the auditing firm "Treuarbeit" had, in order to arrive at the free cash flow, deducted every year a certain amount from the cash flow of that year for reinvestment. If the total cash flow was considered to be disbursable, the profitability would decrease over time as the company would not be able to carry out necessary reinvestments.

The complainant's observations

The Commission's letter was sent to the complainant for his observations. In a letter of 30 August 2005, the complainant informed the Ombudsman that, in order to avoid having to repeat the arguments he had already submitted, he wished to refer to a book that he had published. However, the complainant did not include a copy of that book.

The Ombudsman's letters of 21 September 2005

The Ombudsman noted that the Commission, in its reply, had submitted that the questions that he had put to it concerned new issues that the complainant had not raised at the time when he had complained to DG Competition on 6 December 2003. According to the Commission, these issues were therefore of no relevance for the question as to whether the Commission had dealt appropriately with the complaint that it had received from the complainant.

However, it appeared clearly from the submissions that the complainant has made to the Ombudsman that he wished the Commission to deal with the further points that he had raised during this inquiry and alleged that the Commission's failure to do so was an instance of maladministration.

The Ombudsman therefore considered it appropriate to clarify that the scope of the present inquiry also covered these further points and their handling by the Commission.

The allegation and claim made by the complainant thus had to be considered to be worded as follows:

The complainant alleges that the Commission’s Directorate-General Competition failed to consider his letter of 6 December 2003 and the further arguments and evidence submitted by him during the inquiry conducted by the Ombudsman with the requisite care. The complainant claims that the Commission should carry out an appropriate examination.

In a letter sent on 21 September 2005, the Ombudsman therefore invited the Commission to make any further comments it might wish to make on the complainant's allegation and claim, modified and extended as set out above.

The complainant was informed accordingly on the same day. In his letter to the complainant, the Ombudsman noted that it would be useful if he could have a full copy of the text of the relevant evaluation report, excerpts of which the complainant had submitted to him previously.

On 18 October 2005, the complainant provided the Ombudsman with the full copy of the said report and with a copy of another document.

The Commission's reply

In its reply to the Ombudsman's letter of 21 September 2005, the Commission made the following comments:

The Commission had adequately responded to the main issue of the complaint which concerned the potential state aid in favour of Preussag AG.

Following information obtained from press articles, in May 1998 the Commission sent a request for information to the German authorities. According to these press articles, Preussag AG had already sold between 5 000 and 7 000 company flats by 1998 although the evaluation of the company flats in the context of the privatisation of Salzgitter AG had been based on the assumption that a maximum number of 2 500 flats could be sold. Following the Commission's request, the German authorities had submitted extensive information. Moreover, the Commission had had at its disposal information provided by a third person.

On the basis of the information at its disposal in 1998, the Commission had come to the conclusion that a further investigation would not be justified. The Commission's assessment in 1998 comprised an analysis of whether the evaluation of the company flats included state aid, that is to say whether the property had been evaluated at a price below the market price.

The auditing firm "Treuarbeit"'s evaluation in 1989 had been based on the assumption that only 2 500 of the flats could be sold over the following ten years. This rested on the confirmation by the administrative council of Salzgitter AG that a large part of the company flats could not be sold as they were occupied by employees and former employees of the company as well as for economic reasons and reasons related to regional policy. The assumption of "Treuarbeit" was reflected in the privatisation contract which contained a clause stipulating that the sale of 2 500 flats could only be exceeded if doing so were to become necessary because of a change in the economic environment and in line with the social responsibility of the group. The relevant assumption of "Treuarbeit" thus did not seem obviously incorrect at the time of the evaluation. The Commission had therefore come to the conclusion that, in the absence of proof of an intentional undervaluation, it did not seem possible to assume the existence of state aid in this context.

It was important to stress that a distinction had to be drawn between an ex-ante assessment of the purchase price and an ex-post assessment. In order to demonstrate that state aid was involved in the privatisation of Salzgitter AG, it had to be shown that there was an obvious undervaluation at the time of the evaluation of the property in 1989.

It should further be noted that the complainant was also seeking action at the European level as regards alleged fraud and bribery. It was important to note that the Commission did not have the power to carry out investigations into fraud and bribery in the Member States. Such matters fell within the exclusive responsibility of the Member States.

The complainant's observations

In his observations, the complainant maintained his complaint. He stressed that the incidents involving the group around Preussag AG and WestLB constituted the most serious documented case of fraud in German history. The complainant indicated that he would send various enclosures by a separate e-mail.

The complainant's further letters

On 17, 23 and 31 January 2006, the complainant forwarded to the Ombudsman copies of letters that he had addressed to or received from other persons. These letters concern alleged cases of fraud or corruption and other alleged scandals that the complainant considers to be relevant to the present case. On 9 February 2006, the complainant sent a further letter to the Ombudsman in which he drew attention to what he perceived to be corrupt or criminal politicians and shortcomings in the German justice system. On 17 February and 1 March 2006, the complainant sent e-mails with further information concerning these issues.

THE DECISION

1 Introductory remarks

1.1 In 1989, Preussag AG (now "TUI AG") acquired Salzgitter AG(3), a state-owned company, for DM 2.452 billion. According to the complainant, a former member of the management board of Preussag AG, the value of the property of Salzgitter AG had been estimated to be worth DM 454.2 million at the time of the acquisition. In the complainant's view, the insurance value of the above-mentioned property amounted to DM 10.2 billion. According to the complainant, the liquid assets of Salzgitter AG covered the purchase price at the time. In the complainant's view, Preussag AG thus effectively acquired Salzgitter AG “for free” and received illegal state aid amounting to EUR 7.5 billion.

On 6 December 2003, the complainant wrote to the Directorate-General for Competition of the European Commission ("DG Competition") in order to ask it to intervene in relation to the state aid that had, in his view, been granted to Preussag AG/TUI AG. The complainant pointed out that Preussag AG had in the meantime sold a substantial number of flats. He added that he considered this to be in breach of the terms of the purchase agreement. He stressed in this context that it had been agreed at the time of the sale that the purchaser should not sell more than 2 500 of the flats it acquired. The complainant submitted that the proceeds from this sale had been used to offset the operative losses in Preussag AG's core activities and to help finance the acquisition of various companies in the tourism sector, thus massively affecting competition in this area. The complainant also argued that accounts had been falsified, that auditors as well as members of the managing and the supervisory boards had been bribed, that politicians and managers had been blackmailed and that other crimes had been committed. According to the complainant, the German judicial system found it hard to clarify the matter since high-ranking German politicians and managers were involved.

The complainant further submitted that the German government's reply of 17 July 1998 to a request for information from the Commission concerning this case had been deliberately incorrect.

In its reply of 18 February 2004, DG Competition pointed out that it had already, in 1998, examined the sale of Salzgitter AG, in particular as regards the property, with a view to finding out whether it was compatible with the state aids provisions of the EC Treaty. According to the Commission, this examination had shown that there were no indications of an illegal state aid. The Commission expressed the view that the complainant's letter of 6 December 2003 contained no new elements that would justify a different interpretation of the relevant facts. It added that on the basis of the complainant's letter there was nothing to suggest that the German government had provided false information to the Commission as regards the sale of Salzgitter AG. The Commission concluded by pointing out that it was not in a position to deal with the alleged criminal acts referred to by the complainant, which would fall under the competence of national courts.

1.2 In his complaint to the Ombudsman, which was lodged in March 2004, the complainant alleged that DG Competition had failed to consider his letter of 6 December 2003 with the requisite care. He claimed that the Commission should carry out an appropriate examination.

1.3 In the Ombudsman's view, the complainant's main argument developed in his letter of 6 December 2003 to DG Competition was that there had been illegal state aid. Accordingly, the complaint to the Ombudsman should be understood as alleging that the Commission had failed to proceed to an appropriate examination of the question as to whether there had been an illegal state aid. This allegation will be examined below (see point 2).

1.4 In his letter to DG Competition of 6 December 2003, the complainant also called on the Commission to open criminal proceedings at the EU level and in particular to examine the role played by WestLB AG, the major shareholder of Preussag AG/TUI AG. The Ombudsman notes that the Commission, in its reply of 18 February 2004, explained that it was not in a position to deal with the alleged criminal acts referred to by the complainant, which would fall under the competence of the national courts. In the Ombudsman's view, this position appears to be reasonable. There is therefore no maladministration as regards the Commission's handling of this aspect of the matter.

1.5 The Ombudsman considers it appropriate to stress that he can only examine allegations of maladministration directed at Community institutions or bodies. He is therefore unable to deal with the alleged cases of fraud or corruption and other alleged scandals concerning authorities or individual persons in Germany, which the complainant referred to in his submissions in the present inquiry. The same applies to the alleged shortcomings in the German system of justice invoked by the complainant.

1.6 In his letter to the Commission of 6 December 2003, the complainant further submitted that the reply given to the Commission by the German government on 17 July 1998 had been deliberately incorrect. In his complaint to the Ombudsman, the complainant did not submit a specific allegation regarding this issue. It should be noted that any such allegation would be directed at the German authorities which sent the relevant letter to the Commission. Given that, as mentioned above, the Ombudsman is only competent to handle complaints against Community institutions and bodies, he would therefore not be able to deal with an allegation directed at national authorities.

2 As regards the alleged failure to deal with the complainant's letter and further arguments and evidence with the requisite care and the claim for an appropriate examination

2.1 In his complaint lodged with the Ombudsman on 4 March 2004, the complainant alleged that DG Competition had failed to consider his letter of 6 December 2003 (in which he had alleged that the sale of Salzgitter AG to Preussag AG in 1989 had involved state aid) with the requisite care. He claimed that the Commission should carry out an appropriate examination.

2.2 In its opinion, the Commission stressed that, following another complaint launched in 1998, it had already assessed the sale of Salzgitter AG, in particular the sale of the property, with regard to its compatibility with Community law on state aids. This assessment had led to the conclusion that there seemed to be no indication of illegal state aid at the time of the privatisation and that intervention by the Commission was therefore not justified. The Commission pointed out that this assessment had been based on the information provided by the German authorities in their letter of 17 July 1998 but also on other information (such as the privatisation contract of 1989 and the evaluation report that had been prepared at the time for the purposes of determining the purchase price by the auditing firm "Treuarbeit").

As regards the complainant's argument that the information provided in the letter of 17 July 1998 was in contradiction with the content of the privatisation agreement concluded in 1989 and with the German federal budgetary legislation, the Commission took the view that the complainant had not submitted a more detailed explanation of the precise nature of what he saw as a contradiction. Furthermore, these were internal issues that should be dealt with by national courts.

The Commission added that since the complainant had not provided any new information on the issue of the allegedly illegal state aid nor proper evidence to support his allegations that the information provided by the German authorities was incorrect, it had not been possible at this stage to do otherwise than to follow the initial assessment of 1998.

2.3 In his observations on this opinion, the complainant maintained his complaint. He also submitted an article published in a German newspaper in April 2000, according to which Preussag AG had paid for trips to the Olympic Games in the USA that two managers of the firm evaluating Preussag AG's accounts (including one who had dealt with the evaluation of Salzgitter AG at the time of its privatisation) and their wives had made in 1996.

2.4 Having examined the Commission's opinion and the complainant's observations, the Ombudsman considered that he needed further information to deal with the complaint. On 24 September 2004, he therefore addressed a request for further information to the Commission.

2.5 In its reply to this request, the Commission made the following further comments:

The price for the sale of Salzgitter AG had been determined by an expert report prepared by the auditing firm "Treuarbeit", which had based its evaluation on the actualised value of the future revenues of the company. Concerning the general method of evaluation used by "Treuarbeit", the Commission's services had come to the conclusion that it corresponded to the method commonly used in this field at the time. Although the hypothesis on the basis of which the evaluation had been done could always be discussed, it had been concluded that at that time it had been a choice which did not have an abnormal character.

As regards the evaluation of the non-commercial property, the auditing firm's assessment had been based on information provided by Salzgitter AG, according to which the largest part of the flats belonging to Salzgitter Wohnungs-AG ("WAG") and Kieler Werkswohnungen GmbH ("KWW") was not marketable and could not be sold, mainly because around half of the housing in question was rented to employees and pensioners of the group. The evaluation of these, allegedly non-marketable flats, had been based on the actualised rent payments. "Treuarbeit" had based its evaluation on the assumption that it would not be possible to sell more than 2 500 flats owned by WAG and KWW at an average price of DM 50 000 per unit in the course of the following ten years.

The privatisation contract had included a protection clause that should have limited the possibility of a free sale of more than 2 500 flats over 10 years to a situation in which this became necessary from an economic point of view due to a change of circumstances, and only while respecting the social responsibility of the group. However, until 1998 WAG and KWW had sold more than 2 500 (of their holding of about 28 000) flats.

The Commission had asked Germany to comment on the information published in a German newspaper in 1991, according to which the insurance value of the property in question was around DM 10.2 billion, which was much higher than the purchase price. The German authorities had explained that the relevant amount, in fact, related to the insurance value of the property of the whole Preussag group in 1989/90 and that the insurance value of the property of Salzgitter AG alone had been significantly lower. They had further explained that the value of a property for insurance purposes was determined differently from the market value of such a property, namely, on the basis of how much it would cost to rebuild the property.

The Commission's services had therefore come to the conclusion that the hypothesis used by the auditing firm "Treuarbeit" at that time appeared reasonable, that there was no proof of an undervaluation and that it did not therefore seem possible to assume the existence of state aid in this context.

As regards the claim of a breach of the protection clause in the privatisation contract due to the sale of more than 2 500 flats, the German authorities had presented arguments to show that the sales had been conducted in line with the conditions of that clause. In any event, the Commission's services had concluded that they would not have the competence to act, under the pretext of state aid, in a dispute regarding the interpretation of the clauses of the privatisation contract and that any possible litigation had to be subject to national civil law.

2.6 Together with his observations on this reply lodged on 23 December 2004, the complainant submitted excerpts from what appeared to be the minutes (or a draft of the minutes) of the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony, which was held on 28 November 1998. According to these minutes, Mr E., a member of the Parliament, had stated that the price set for Salzgitter AG in 1989 "which had subsequently been paid from the reserves of Salzgitter AG, was a political price, i.e., it was not a market price". Mr E. had further stated that the federal government had declared at the time that "the price and the procedure should be set in such a way as to ensure that a company from Lower Saxony should remain a company from Lower Saxony". According to Mr E., this had suited Preussag AG perfectly well at the time "because the company had been in a difficult period". Mr E. had added that "the purchase price had then been kept very low for political reasons; and now this present was to be made into money for other purposes". In other words, for purposes other than the social purposes that Preussag AG had taken on. In his reply, Mr T., then secretary of state in Lower Saxony, made the following comment: "What you have said just now is what I had tried to formulate in a very cautious and diplomatic way in my opening statement."

The complainant submitted that a 'real' purchase of the company that had been worth around DM 15 billion (DM 10.2 billion for property, DM 2 billion for participations in other companies and DM 2.5 billion in cash) by Preussag AG would have been impossible in 1989. He added that in order to save Preussag AG from bankruptcy, all the state property had therefore been transferred to Preussag AG and only the cash had been taken out of the company. In the complainant's view, Preussag AG had as a consequence obtained possession of Salzgitter's assets amounting to DM 12.5 billion (15 - 2.5 billion) without having had to pay a 'real' price. The complainant submitted that Salzgitter had not been sold but basically been presented as a gift.

The complainant further produced an offer for one of the flats concerned that was issued in February 1991 and which amounted to DM 71 700. The complainant submitted that, in the light of this offer, it could be assumed that the relevant flats had been worth around DM 3 to 4 billion.

2.7 On 20 January 2005, and in the light of these comments, the Ombudsman again asked the Commission for further information in relation to this case. In its reply to this second request for further information, the Commission made the following further comments:

The complainant did not provide any evidence to show that the purchase price had been financed from the reserves/liquid funds of Salzgitter AG. The statement made by Mr E. could not be regarded as proper evidence, since it was a mere allegation.

Even if the sale had been partly funded by the reserves/liquid funds of Salzgitter AG, this did not mean that the latter had not been sold at a market price and that there had thus been state aid involved in the transfer. Other items and factors influenced the value of a company and had thus to be taken into account when establishing the market price. These items and factors could increase the value of a company but could also reduce its value (for example debts). A comprehensive analysis thus needed to be carried out to assess whether a market price had been paid.

The price of Salzgitter AG had been determined by an expert report prepared by the auditing firm "Treuarbeit", which had based its evaluation on the actualised value of the future revenues of the company. This was a common method to establish the market value of a company. "Treuarbeit" had also not forgotten to evaluate the liquid assets of Salzgitter AG as claimed by the complainant. The expert report explicitly stated that liquid funds that were not used for reinvestment in future periods were considered to bear interest at the market rate and as such to generate future interest revenue. The future interest revenue had been included in the total future revenues and had increased the market value of the company.

The unsupported allegation of the complainant that the purchase price had been financed by the reserves/liquid funds of Salzgitter AG did thus not alter the Commission's assessment of the case.

As regards the price referred to be complainant, a sales price of DM 71 000 could well be considered to be in the range of prices evaluated by the auditing firm "Treuarbeit", given that the latter had evaluated the average sales price per unit to be DM 50 000.

2.8 In his observations on this reply, the complainant took the view that he had submitted more than a "mere allegation". The complainant further stressed that the relevant report had been drawn up by the auditing firm "Treuarbeit" which had examined the accounts of Salzgitter AG and Preussag AG for many years both before and after the sale. According to the complainant, it could be shown that this company had been bribed by Preussag AG. The complainant further stressed that liquid funds did not need to be evaluated but had to be included, at their full value, in the purchase price.

2.9 The Ombudsman noted that the Commission, in its reply to his second request for further information, had submitted that the questions that he had put to it concerned new issues that the complainant had not raised at the time when he had complained to DG Competition on 6 December 2003. According to the Commission, these issues were therefore of no relevance to the question of whether the Commission had dealt appropriately with the complaint that it had received from the complainant. However, it appeared clearly from the submissions that the complainant had made to the Ombudsman that he wished the Commission to deal with the further points that he had raised during this inquiry and alleged that the Commission's failure to do so was an instance of maladministration.

The Ombudsman therefore considered it appropriate to clarify that the scope of the present inquiry also covered these further points and their handling by the Commission. On 21 September 2005, he therefore informed the Commission that the allegation and claim made by the complainant had to be considered to be worded as follows:

The complainant alleges that the Commission’s Directorate-General Competition failed to consider his letter of 6 December 2003 and the further arguments and evidence submitted by him during the inquiry conducted by the Ombudsman with the requisite care. The complainant claims that the Commission should carry out an appropriate examination.

In his letter of 21 September 2005, the Ombudsman therefore invited the Commission to make any further comments it might wish to make on the complainant's allegation and claim, modified and extended as set out above. A copy of the complainant's letter of 12 April 2005 was forwarded to the Commission on this occasion.

2.10 In its reply, the Commission expressed the view that it had adequately responded to the main issue of the complaint which concerned the potential state aid in favour of Preussag AG. The Commission stressed that a distinction had to be drawn between an ex-ante assessment of the purchase price and an ex-post assessment. In order to demonstrate that state aid was involved in the privatisation of Salzgitter AG, it had to be shown that there was an obvious undervaluation at the time of the evaluation of the property in 1989. In the Commission's view, however, this had not been established.

2.11 In his observations on this reply, the complainant maintained his complaint.

2.12 Before examining the present case, the Ombudsman considers it useful to summarise the arguments on which the complainant relies in order to support his view that the sale of Salzgitter AG to Preussag AG in 1989 involved state aid. The complainant submits (1) that the value of the property belonging to Salzgitter AG had been set at much too low a figure; (2) that Preussag AG had infringed the clause in the purchase agreement concerning the sale of that property as well as German federal legislation; (3) that the overall value of Salzgitter AG had been incorrectly calculated by the auditing firm "Treuarbeit"; (4) that Preussag AG had bribed its auditors; and (5) that statements made at a meeting of a committee of the Parliament of Lower Saxony suggested or proved that there had been state aid. It should be noted that some of these arguments were only raised during the Ombudsman's inquiry into the present complaint.

2.13 As regards the evaluation of the property belonging to Salzgitter AG, the auditing firm "Treuarbeit" based itself, in its evaluation report drawn up in 1989, on the assumption that only 2 500 of the relevant flats could be sold over the following ten years. As the Commission has observed, this assumption was reflected in the privatisation contract which contained a clause stipulating that the sale of 2 500 flats could only be exceeded if doing so were to become necessary because of a change in the economic environment and in line with the social responsibility of the group. In view of these facts, the Ombudsman considers that the Commission was entitled to take the view that the relevant assumption made by "Treuarbeit" did not seem obviously incorrect at the time of the evaluation and that in the absence of proof of an intentional undervaluation, it did not seem possible to assume the existence of state aid in this context. The Commission's view that a distinction ought to be drawn between an ex-ante and an ex-post assessment of the purchase price and that, in order to demonstrate that state aid was involved in the privatisation of Salzgitter AG, it had to be shown that there was an obvious undervaluation at the time of the evaluation of the property in 1989 appears reasonable in the Ombudsman's view.

2.14 In this context, the complainant further argued that the insurance value of the above-mentioned property amounted to DM 10.2 billion and that the evaluation of this property at DM 454.2 million thus appeared to be obviously incorrect. In its reply to the Ombudsman's first request for further information, the Commission pointed out that it had asked the German authorities to comment on this issue (apparently during the examination it had carried out in 1998). The German authorities had explained that the relevant figure in fact related to the insurance value of the property of the whole Preussag group in 1989/90 and that the insurance value of the property of Salzgitter AG alone had been significantly lower. They had further explained that the value of a property for insurance purposes was determined differently from the market value of such a property, namely on the basis of how much it would cost to rebuild the property. On this basis, the Commission had concluded that there was no proof of an undervaluation and that it did not therefore seem possible to assume the existence of state aid in this context.

The Ombudsman notes that the complainant has not put forward any evidence that would call into doubt the above-mentioned arguments of the German authorities. Given that these arguments would at first sight appear to provide a reasonable explanation for the difference between the insurance value to which the complainant referred and the valuation made of the property belonging to Salzgitter AG, the Ombudsman considers that the complainant has not shown that the Commission made a mistake when concluding that this difference did not constitute proof of an undervaluation.

2.15 As regards the complainant's argument that Preussag AG had infringed the clause in the purchase agreement concerning the sale of that property and the German federal budgetary legislation by selling more flats than had been envisaged, the Ombudsman agrees with the Commission's view that these are internal issues that should be dealt with by national courts. As the Commission has correctly pointed out, in order to demonstrate that state aid was involved in the privatisation of Salzgitter AG, it had to be shown that there was an obvious undervaluation at the time of the evaluation of the property in 1989. However, the sales to which the complainant referred took place after Preussag AG had acquired Salzgitter AG.

2.16 According to the complainant, the purchase price for Salzgitter AG had been paid with the liquid assets of Salzgitter AG that the evaluators had 'forgotten' to evaluate. The complainant thus effectively argued that the evaluation made by the auditing firm "Treuarbeit" had been incorrect. The Commission submitted that "Treuarbeit" had based its evaluation on the actualised value of the future revenues of the company and that this method of evaluation corresponded to the method commonly used in this field at the time. Although the hypothesis on the basis of which the evaluation had been done could always be discussed, it had been concluded that at that time it had been a choice which did not have an abnormal character.

In its reply to a request for further information, the Commission submitted that even if the sale had been partly funded by the reserves/liquid funds of Salzgitter AG, this did not mean that the latter had not been sold at a market price and that there had thus been state aid involved in the transfer. According to the Commission, other items and factors influenced the value of a company and had thus to be taken into account when establishing the market price. As regards the cash available in the company, the Commission pointed out that the evaluation of the value of Salzgitter AG had been based on the so-called discounted cash flow analysis ("DCF analysis"). In the context of such an analysis, the net asset value of a company was only of minor importance.

2.17 The Ombudsman considers it useful to stress that his task is to ascertain whether there has been maladministration on the part of a Community institution or body, in the present case, the Commission. In the present context, the Ombudsman thus has to examine whether the Commission's view that the method used by the auditing firm "Treuarbeit" for the purpose of evaluating Salzgitter AG in 1989 and its application were acceptable constitutes maladministration. Since the Commission necessarily has a wide discretion in such matters, the Ombudsman considers that maladministration could only be found in such cases where the Commission has committed a manifest error of appraisal. The Ombudsman considers that no such manifest error has been proven as regards the Commission's appraisal of the work carried out by "Treuarbeit" in the present case. The complainant has not put forward any evidence to show that the Commission's view according to which the method used by "Treuarbeit" was not abnormal was manifestly incorrect. As regards the application of this method in the relevant case, it is true that the complainant has raised a number of issues that could call into doubt the Commission's appraisal. The Ombudsman considers, however, that the complainant has not established that the Commission has made a manifest error in this context.

2.18 The complainant has submitted a newspaper article according to which Preussag AG provided certain benefits in 1996 to some of its auditors, including one who had worked on the evaluation of Salzgitter AG. It is clear that the probative value of such an article (if any) is necessarily limited. However, even if it were to be assumed that Preussag AG granted illegal benefits to its auditors in 1996, the Ombudsman takes the view that this would not prove that the evaluation made by "Treuarbeit" of Salzgitter AG in 1989 was incorrect and that the Commission was therefore not entitled to accept that evaluation.

2.19 Together with his letter of 23 December 2004, the complainant submitted excerpts from what appeared to be the minutes (or a draft of the minutes) of the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony that was held on 28 November 1998. According to these minutes, Mr E., a member of the Parliament, had stated at the meeting that the price set for the privatisation of Salzgitter AG in 1989 "which had subsequently been paid from the reserves of Salzgitter AG, was a political price, i.e., it was not a market price". Mr E. had further stated that the federal government had declared at the time that in order to maintain Peine and Salzgitter as an industrial site, Salzgitter AG should not be sold to a competitor from the Rhine or Ruhr region and that "the price and the procedure should be set in such a way as to ensure that a company from Lower Saxony should remain a company from Lower Saxony". According to Mr E., this had suited Preussag AG perfectly well at the time "because the company had been in a difficult period". Mr E. had added that "the purchase price had then been kept very low for political reasons; and now this present was to be made into money for other purposes. The responsibility that Preussag AG also took over at the time is no longer being respected." In his reply, Mr T., then secretary of state in Lower Saxony, had made the following comment: "What you have said just now is what I had tried to formulate in a very cautious and diplomatic way in my opening statement."

2.20 The Ombudsman notes that the Commission has not called into doubt the accuracy of the summary of the above-mentioned conversation submitted by the complainant. It therefore appears justified, for the purposes of the present inquiry, to proceed on the basis of the assumption that the document submitted by the complainant correctly reflects what was said on the occasion of the relevant meeting.

2.21 In the Ombudsman's view, the contents of the document submitted by the complainant allow the conclusion that Mr E. considered that Salzgitter AG had been purchased by Preussag AG at a price that was not the market price. The Commission correctly observed that the statement made by Mr E. could not be regarded as proper evidence, since it was a mere allegation. However, the document submitted by the complainant also recorded the reply given to this statement by Mr T., then secretary of state in Lower Saxony. In the Ombudsman's view, it emerges from this reply that Mr T. considered Mr E.'s statement to be correct. Seen from this perspective, Mr E.'s statement is thus no longer a "mere allegation" but the expression of a view that was shared by the government of Lower Saxony, that it to say the Land most directly affected by the sale of Salzgitter AG to Preussag AG.

2.22 In view of the above, the Ombudsman considers that good administrative practice would at least have required the Commission to try and ascertain whether, contrary to its assumption thus far, the sale of Salzgitter AG to Preussag AG did after all contain elements of state aid. In order to do so, the Commission could, for example, have addressed a request for information to the German authorities. It should be noted that, both in its opinion and in its reply to the Ombudsman's first request for further information, the Commission had stressed that it was always prepared to consider any new arguments, provided the complainant was able to submit sufficient explanations and evidence for such arguments.

2.23 However, in reply to a question to that effect, the Commission informed the Ombudsman that it had not taken any steps to clarify the statements made by Mr E. and Mr T. in the 72nd meeting of the Committee on Economic Affairs and Transport of the Parliament of Lower Saxony. In this context, the Commission stressed that it had based its assessment on information that it had officially received from the German federal government and that it had to rely on the accuracy of this information unless there was a strong indication that the information provided was incorrect. The Ombudsman agrees that the Commission is entitled to presume that information it receives from national authorities is correct. However, the above-mentioned document submitted by the complainant clearly suggests the possibility that the sale of Salzgitter AG to Preussag AG entailed elements of state aid and thus constituted a strong indication that the information that had been provided by the German authorities might have been incorrect. In view of the serious nature of the complainant's allegation, it would thus have been appropriate for the Commission to clarify the issue. In the Ombudsman's view, the Commission's decision not to undertake any inquiries thus constitutes maladministration.

3 Conclusion

In view of the above, the Ombudsman makes the following draft recommendation to the Commission, in accordance with Article 3 (6) of the Statute of the Ombudsman:

The draft recommendation

The Commission should take appropriate steps in order to ascertain whether the sale of Salzgitter AG to Preussag AG in 1989 entailed elements of state aid.

The Commission and the complainant will be informed of this draft recommendation. In accordance with Article 3(6) of the Statute of the Ombudsman, the Commission shall send a detailed opinion by 30 June 2006. The detailed opinion could consist of the acceptance of the Ombudsman's decision and a description of the measures taken to implement the draft recommendation.

Strasbourg, 16 March 2006

 

P. Nikiforos DIAMANDOUROS

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(1) Decision 94/262 of 9 March 1994 of the European Parliament on the Regulations and General Conditions Governing the Performance of the Ombudsman’s Duties, OJ 1994 L 113, p. 15.

(2) It should be noted that this company is not identical to the present "Salzgitter AG".

(3) It should be noted that this company is not identical to the present "Salzgitter AG".