Croatia steps up pressure on Hungary's MOL

By bne IntelliNews November 22, 2012

bne -

Croatia has stepped up pressure on Hungary's MOL for changes to the management of national oil and gas company INA.

The move follows the November 20 jailing of former prime minister Ivo Sanader for 10 years on charges that he took bribes from the Hungarian energy group in return for greater control of INA. Croatian Finance Minister Slavko Linic said the shareholder agreement with MOL, which owns just under 50% in the Croat company, should be renegotiated as soon as possible.

"I believe the new circumstances related to the verdict could help MOL understand we will insist on changes and that there is no reason to lose time waiting for the final ruling," Linic told the state radio, referring to the liklihood of an appeal from the former PM.

"The talks with MOL are going on," the finance minister said. "They are not easy and are taking a considerable time. Regardless of the verdict against Sanader, the government is not happy with the (shareholders) agreement." Such a move was widely anticipated, and MOL shares fell in trading following the announcement of the verdict against Sanader.

Wrapping up a long case, a Zagreb court ruled that the former PM had accepted a €5m bribe from MOL in 2008 in return for full management rights in INA. The Hungarian company has been fighting a bitter war with Zagreb for control of the company ever since. INA - and more specifically its crude oil ports on the Adriatic - is key to the Hungarian company's bid to become a regional power.

Unsurprisingly, MOL agrees with the former PM's claim that the guilty verdict is politically motivated, saying that the trial had produced no evidence of wrongdoing and delivered "factually incorrect comments" about INA and MOL. "We would query whether the procedures followed - with regard to the claims made against MOL - would be considered compatible with established legal procedures elsewhere in Europe," the Hungarian firm said in a statement.

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