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News 05 Oct 17

Croats Fear Agrokor Report Will Reveal New Debts

As the state management of Agrokor prepares to reveal the results of an in-depth financial study on Thursday, many fear that it will reveal new, previously hidden, company debts.

Sven Milekic
Agrokor's state extraordinary manager Ante Ramljak. Photo: Beta

While the Croatian state's extraordinary management of the country's biggest company, Agrokor, prepares to unveil a financial analysis of its businesses over the last years on Thursday, many fear the report may reveal new enormous debts.

After Ivica Todoric, the founder and majority owner of the company, handed over Agrokor to the state to manage for a 15-month period in April, the public awaits the results of the audit, which may reveal a grim situation in the company.

The state-appointed "extraordinary management" was supposed to reveal the information last week, but postponed it owing to the complexity of the report, which has been done by outside audit houses.

The daily Vecernji list reported on Tuesday that the revision will show that Todoric’s management concealed around 400 million euros of costs between 2010 and 2015.

But Vecernji cautioned that this figure only refers to the mother company, Agrokor, which means that the total figure for the whole group may be larger.

Earlier, quoting documents from Baker Tilly audit agency, as well as internal Agrokor documents and inside sources, the weekly Nacional reported that the company had concealed around 300 million euros of losses.

Using his new blog, Todoric has meanwhile started attacking the government, claiming that the law on which the state runs the company is not constitutional.

He has also claimed that the government, and in particular, the Economy Minister, Martina Dalic, blackmailed him.

An anonymous criminal report was filed against Dalic, Agrokor’s extraordinary manager Ante Ramljak and others in late September, accusing them of abuse of office as a part of a joint criminal enterprise.

The report alleged that they had gathered together to take over Agrokor for their own, and other people’s, private interests, inflicting damage on the economy and on Croatia.

If results of the revision do indeed show up costs that previous financial reports did not reveal, it may trigger an additional criminal investigation by the state attorney's office.

“I do not know what it [the report] will bring or when it will be published, but it is important,” Dinko Cvitan, the chief state attorney, said on Wednesday.

The main opposition Social Democratic Party, SDP, is pushing for the formation of a parliamentary investigative committee into Agrokor that will delve deeper into all the events that preceded the state takeover in April.

If the ruling Croatian Democratic Union, HDZ, does not agree to set up the committee, the SDP has warned that it will not support the proposed judges for the constitutional court – who are named by a two-thirds majority of members of parliament.

While parliament is due to vote on the proposed committee on Friday, the HDZ has said it opposes its establishment, claiming it will interfere with the ongoing investigation into Agrokor.

However, Cvitan maintained that the committee would in no way interfere with the work of the state attorney's investigation.

“I don’t think it will interfere with our work if it [committee] is founded; they will deal with some other aspects, and we’ll [deal] with the facts in order to detect possible criminal offences,” he concluded.

The company's role in the economy of Croatia is massive, with revenues of 6.5 billion euros in 2015 – almost 16 per cent of Croatia's total GDP – and around 40,000 employees.

Agrokor employs another 20,000 people in neighbouring Bosnia and Serbia, while it is believed that suppliers and companies for the Slovenian retailer Mercator – which Agrokor bought in 2014 – employ around 70,000 people in Slovenia as well.

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