Former Croatian PM Sanader released from custody

Former Croatian PM Sanader released from custody
By Carmen Simion November 26, 2015

Croatia's former prime minister Ivo Sanader has been released from investigative custody following a ruling by the country’s constitutional court that his detention had been illegally extended.

The release of the former prime minister, sent to prison for corruption, raises questions about the country’s judicial system. Since Sanader was originally sentenced after being found guilty of receiving bribes from MOL, his release could complicate the government’s ongoing struggle with the Hungarian energy group for control of Croatian oil and gas company INA.

It also comes at a time when his former party, the conservative Croatian Democratic Union (HDZ) is trying to form a new government. The HZD took a narrow lead over the ruling Social Democrats (SDP) in Croatia’s November 8 parliament elections, but fell well short of a majority. Negotiations on the formation of a new ruling coalition are underway, with Most, a new right-leaning grouping of independents, set to play kingmaker. However, Sanader’s release is not expected to affect the negotiations, as HDZ expelled its former leader back in January 2010.

Sanader was initially sent to prison for ten years, but in 2014 his sentence was reduced to eight years and six months. Earlier this year, the constitutional court annulled Sanader’s corruption convictions, citing procedural errors.

The decision of the Zagreb county court to release Sanader from custody on November 25 comes just one day after the constitutional court ruled that his stay in prison had been illegally prolonged by the supreme court, and that he should be released no later than November 30, according to Hina news agency.

The constitutional court noted that its ruling only dealt with procedural matters relating to the extension of investigative custody for the accused, and not with his guilt.

Sanader has been in prison since November 2012 when he was found guilty of taking bribes from MOL and Austria's Hypo Alpe Adria bank. He was sentenced for accepting €10mn in bribes in 2008-2009 from the MOL head Zsolt Hernadi to help the company obtain a dominant position in INA. Also, between 1994 and 1995, when Sanader was deputy minister for foreign affairs, he was found to have received a commission of HRK3.6mn (€475,000) from Hypo Alpe Adria bank.

In March this year, Sanader was sentenced again, this time to nine years in jail after being found guilty of masterminding a joint criminal enterprise that extracted more than HRK70mn from public companies. This was used both to fund his own lavish personal lifestyle and to provide illegal financial support to HDZ. The funds were extracted via contracts concluded with marketing firm Fimi-Media. However, the constitutional court annulled these convictions earlier this year, citing procedural errors.

Croatia owns a 44.85% stake in INA, while MOL holds a 49.1% stake and the management rights. The two shareholders have been locked in a long dispute over INA’s management rights, with both sides filing arbitration suits against the other, while Croatia decided in June 2014 to try Hernadi in absentia.

The annulment is likely to complicate Croatia's negotiations with MOL over INA’s management, but might end up softening Zagreb's stance considering it has based its claims in part on Sanader’s guilty verdict.

Hernadi recently suggested the Hungarian company might seek to increase its stake in INA, which could be a sign of an improved relationship between INA's two main shareholders. Moreover, Croatia has not made any announcement regarding a new shareholder agreement for INA which in May economy minister Ivan Vrdoljak said it would be offered “very soon” to MOL.