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News 03 Nov 17

Croatian Agrokor Probe May Uncover Privatisation Abuses

The Croatian committee probing the country's ailing giant Agrokor is seen as likely to shed fresh light on the irregularities that marred the privatisation processes of the 1990s.

Sven Milekic
BIRN
Zagreb
Ivica Todoric. Photo: Beta

As a Croatian investigative parliamentary committee prepares to hear the first testimonies on how the country's biggest private company, Agrokor, was created, many irregularities from the privatisation processes of the 1990s are expected to be revealed.

Under pressure from the opposition Social Democratic Party, SDP, the committee was set up to investigate how Agrokor became such a massive company, as well as the events that led to parliament adopting a special law placing the indebted company under state management.

At the first session on Friday, former Prime Minister and President Stjepan Mesic will testify, while another former Prime Minister Josip Manolic will testify on Tuesday.

Manolic, the former senior Yugoslav secret service official, played an important prole in setting up Croatia’s own secret service in the 1990s.

Ivan Penic and Milan Kovac, senior officials in the ruling Croatian Democratic Union, HDZ, during the 1990s, will also testify on Tuesday.

Dario Jurican, a film director who made an investigative documentary about Agrokor and its owner and founder Ivica Todoric, called "Gazda" ["The Boss"], told BIRN that the “purpose of the committee is not just Agrokor but to expose the mechanics of privatisation”.

He said that each of the persons summoned to testify before the committee “holds a piece of the puzzle” in the murky privatisation process of the 1990s.

“These were people in high office at the time, and they precisely know how the mechanism of privatisation functioned and how the big companies got into hands of big Croatian tycoons,” he said.

A Law on Transformation of Social Enterprises was passed at the beginning of the war of independence in 1991.

Under this law, socially and state-owned companies from former Yugoslavia were transformed into private concerns. A subsequent Law on Privatisation was passed only in 1996.

Jurican explained that, as Penic headed the fund for privatisation in 1993, later becoming a Minister for Privatisation and Management of State Property, he should have good information about the privatisation process.

Mesic and Manolic are interesting as high-ranking HDZ officials in the early 1990s, he added, while Kovac is the least interesting figure, having only taken over Penic’s position in the mid-1990s.

The privatisation process is now widely seen as unfair and corrupt. In 2004, a state office for revision found irregularities in 95 per cent of 1,481 companies’ privatisation processes that it analysed.

The office noted that the state suffered damages in billions of euros, and filed 71 criminal charges against alleged perpetrators.

Croatia's parliament passed an amendment to the constitution in 2010, scrapping the statute of limitations on crimes to do with privatisation and war profiteering.

However, when the Constitutional Court quashed a court guilty verdict against former Prime Minister Ivo Sanader – for war profiteering – in 2015, it ruled that crimes over which the statute of limitation already held force could not now be prosecuted.

Agrokor’s owner and founder, Ivica Todoric, and his father, Ante, have not answered the summons from the committee to appear; all others have to appear before the committee, or risk a prison sentence of up to five years.

When the first arrests of former Agrokor officials began in mid-October, following revelations of major financial irregularities in the company’s financial records, Ivica Todoric was not present in Croatia.

Since he has not come back to testify, the Croatian authorities have issued a European arrest warrant and an Interpol red arrest warrant for him.

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