Founder of Croatia’s Agrokor arrested in London

By bne IntelliNews November 8, 2017

The founder of Croatia's troubled food and retail giant Agrokor, Ivica Todoric, was arrested in London on November 7,  according to the Croatian interior minister, as quoted by local media.

In October, Croatia issued a European arrest warrant for Todoric, amid an ongoing investigation related to financial irregularities uncovered at the group after it entered restructuring. Agrokor, Croatia’s largest company which employs around 60,000 people in the region, is undergoing restructuring after a debt crisis pushed it to the brink of collapse earlier this year.

The crisis at Agrokor, apart from putting at risks a large number of jobs in a country fighting one of the highest unemployment rates in the EU and threatening to destabilise the economy, has also created political unrest. Croatia’s opposition Social Democratic Party (SDP) has recently filed a no-confidence motion against the government for the way it handled the crisis at Agrokor.

The arrest of Todoric should put some light on the way the company almost collapsed earlier this year. An audit report recently showed that the Agrokor Group’s net loss in 2016 amounted to HRK11bn (€1.46bn), while the company’s liabilities amounted to HRK56.3bn. The report also showed undisclosed liabilities amounting to HRK3.9bn.

In October, the Croatian police raided the house of Ivica Todoric, and several former executives in the company were detained. Todoric reacted to the raids by issuing a statement on his blog, calling the situation a “political process”. 

On October 11, the Croatian parliament approved plans to set up an inquiry commission that will look into alleged wrongdoings at Agrokor The commission will have six months to find out how the food and retail giant ran into trouble.

Agrokor, although still owned by Todoric, has been put under the state’s management. 

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