Equity 3 October 2013, 10:14am

Croatian state majority in INA after Hungarian MOL sale would please unions

Portfolio

Labour unions at Croatian fuels group INA would be pleased if the recommendation by the Hungarian government for MOL to consider selling its 49.1% stake in INA would be resolved in such a way that the Croatian state once again became the majority owner and had majority management rights in the company. The unions claim that MOL had not invested anything to develop Croatia's oil company.

Ivan Tomac, head of the independent union of workers in energy, chemicals and non-metals, told Croatian news agency Hina that the Hungarians had made a "fat profit" in INA and would probably make even more by selling its shares in INA but that MOL had not met the conditions set in the original sales contract.

“MOL has not modernised the Rijeka or Sisak refineries, what is more the Sisak refinery has halved its production. MOL has not invested into the retail network but instead franchised it and INA petrol stations in Bosnia and Herzegovina are selling Hungarian and not Croatian oil," Hina cited Tomac as saying late on Wednesday.

Apart from that INA's management board dominated by Hungarians contributed to destroying the Croatian petrochemical industry like Dioki and it was not just the owner Robert Jezic's fault, he added.

The best thing would be for the Croatian state to regain control of INA but if 49% is sold to someone else perhaps the new majority owner will be fairer toward Croatia's economy, said Tomac.

MOL vs. Croatia taken to a political level in Hungary too

On Wednesday, the Hungarian government has asked MOL’s management to review its portfolio and in certain case prepare to sell its stake in INA. This brings new colour to the unfolding story, as it is now clear that the issue has been taken to a political level not only by Zagreb but also by Budapest.The cabinet has also decided to cancel its participation in a summit organised for 3 October in and ordered the Minister of Justice and the management of the Hungarian Asset Manager (which exercises the state’s ownership rights in MOL) to examine what civil and criminal action would be possible to resolve the detriments to MOL and Hungary.

The action comes on the back of Croatia issuing an Interpol Red Notice and a European Arrest Warrant (EAW) for Hernádi, on suspicion that he bribed Croatian Prime Minister Ivo Sanader to give MOL a dominant position in oil and gas firm INA.By now Hernádi’s data sheet has been uploaded to Interpol’s website.

The arrest warrant was issued after Hernadi failed to show up for a Sept. 25 meeting with the Office for Suppression of Corruption and Organized Crime, or USKOK, in Zagreb.

“Not being able to travel internationally until this legal case is solved in our favour would be inconvenient for Mr. Hernadi as an individual, and may hinder some protocol duties, but would not in any way impair his ability to steer the Group in his capacity as Group Chairman and CEO," MOL said in a statement on the website of the Budapest Stock Exchange (BSE) on Wednesday.

"In the interest of the company and its employees MOL will defend itself by all legal means against the outrageous actions that have been taken against Mr. Hernadi and the company, which appear to be influenced by interests seeking to intimidate both the company and its Chairman," it added.