Brussels, 17/11/2004 (Agence Europe) - The European Commission has opened a formal state aid investigation concerning a potential subsidy by the city of Karkkila to Componenta Corporation, a company which produces ready-to-install cast, geared and machined components, based in the same city but with activities in Sweden and the Netherlands. Following a complaint alleging that Componenta Corp had received a subsidy through the price that the city of Karkkila agreed to pay, in December 2003, for the acquisition of its 50% stake in a real estate company. The acquisition by the city of Componenta's 50% share in a real estate joint venture might hide a subsidy, given that the city already owned the other 50% in the venture called Karkkilan Keskustakiinteistöt Oy, which is now being liquidated and the price would have been paid by a normal private investor as the real estate company appeared to be in financial difficulties at the time. The sales agreement also appears to be conditional on the moving of production to Karkkila to create 50-70 new jobs. The Commission said that this aid is not part of regional aid as the city is not covered by this aid and the company that employs 2200 cannot be considered as an SME. Finland has a month to provide an explanation.