October 12, 2022 - Former Prime Minister and President of the HDZ, Ivo Sanader, was acquitted of war profiteering in the Hypo scandal in a retrial on Wednesday, for which he was convicted twice in earlier proceedings.

As Poslovni writes, the verdict was announced by Zagreb County Court judge Saša Lui after the prosecution and defense presented their closing speeches last week. Sanader once again asserted that he was not responsible for war profiteering, stressing that he stands by the defenses he presented in earlier proceedings.

Disputed commission of HRK 3.6 million

Sanader was tried for the third time for the Hypo affair. He was convicted twice before, and the Constitutional and Supreme Courts overturned the verdicts.

Uskok's prosecutor, Marija Vučko, asserted in her closing speech that even in the repeated proceedings, it was proven that Sanader had committed the crimes for which he was accused.

Sanader's lawyer Čedo Prodanović pointed out, on the other hand, that there was no war profiteering in this case and that, despite the conclusions of the higher courts, Uskok did not deviate from its initial position.

The prosecution accused Sanader of receiving a commission of HRK 3.6 million from Hypo Bank as Deputy Minister of Foreign Affairs in late 1994 and early 1995 after Croatia was granted a loan to purchase embassy buildings.

This way, according to the prosecution's claims, in the difficult financial and economic situation caused by the war, Sanader achieved an illegal financial benefit that is disproportionate to the threatened fundamental values ​​of the state and social community, as well as state interests.

Sanader has been in prison since 2019

Sanader has been in prison since April 2019, when the Supreme Court increased his sentence for corruption in the Planinska case to six years in prison.

In mid-October 2021, the Supreme Court partially confirmed the verdict from the repeated proceedings in the Fimi Media case, according to which HDZ must pay HRK 3.5 million in fines for extracting money from state institutions and companies, while Sanader's sentence was reduced from eight to seven years in prison.

At the end of October 2021, the Supreme Court confirmed the first-instance verdict by which Sanader was sentenced to six years for accepting a bribe from the head of the Hungarian MOL, Zsolt Hernadi, while the unavailable Hernadi was sentenced to two years in prison.

In mid-November 2021, the Supreme Court confirmed the only acquittal against Sanader, by which he was acquitted together with entrepreneur Robert Ježić for selling cheap electricity to Ježić Dioki to the detriment of HEP.

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ZAGREB, 6 July 2022 - Croatia has lost an arbitration case regarding INA brought by the Hungarian oil company MOL, in which MOL alleged that the Croatian government did not honour its obligations from a gas business agreement, the Večernji List daily said on Wednesday. 

According to unofficial information, having lost the case, Croatia will have to pay between 250 and 300 million US dollars, including interest. Croatia's objections regarding corruption during the purchase of INA by MOL from the Croatian state were rejected as well.

The case was dealt with by the International Court for Settlement of Investment Disputes (ICSID) in Washington.

It was launched in 2013 by MOL, which claimed that Croatia had not honoured its obligations from a master agreement on gas business and its annexes.

Under that agreement, signed in 2009, INA was to divest a part of its (nonprofitable) gas business by having the state take over the underground gas storage facility at Okoli, which the state did, but it did not take over gas trade as well, which was the reason for MOL's lawsuit.

This is the second arbitration case Croatia has lost to MOL. The first one was dealt with by the UN Commission for International Trade Law (UNCITRAL).

Prime Minister Andrej Plenković in late 2016 said that Croatia would buy back MOL's stake in INA and the process is still under way.

MOL is the single largest shareholder in INA, holding 49.1% of the stock (4,908,207 shares), while the Croatian government holds 4,483,552 shares, or 44.8%. Private and institutional shareholders hold 608,241 shares, or 6.1%.

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ZAGREB, 30 Dec 2021 - The government is pausing the buyback of the Hungarian energy group MOL's stake in the INA oil and gas company because of new legal circumstances arising from a Supreme Court verdict and is launching a review of the shareholders' agreement and the gas business agreement, Prime Minister Andrej Plenković said on Thursday.

Speaking at the start of the cabinet meeting, Plenković said that proceedings against the first amendment to the INA shareholders' agreement and the gas business agreement were being launched because the government believes that in light of the Supreme Court's final judgment the agreements cannot be sustained.

In late October, the Supreme Court upheld the trial court verdict sentencing former Prime Minister Ivo Sanader to six years in prison for taking a bribe from MOL CEO Zsolt Hernadi. Hernadi, who remains beyond the reach of the Croatian authorities, was given two years in prison.

Plenković said that the government's decision was based on legal opinions, adding that the government had consulted the State Attorney's Office, the International Law Department at the University of Zagreb's Faculty of Law, and the government's legal representatives in proceedings with MOL.

"In these changed circumstances, we consider it opportune to pause the process of the possible buyback of shares which MOL holds in INA until this new legal circumstance has been resolved," the prime minister said.

The Croatian government and MOL signed the first amendments to the INA shareholders' agreement and the gas business agreement on 30 January 2009.

Under the amendments, the number of Supervisory Board members was increased from seven to nine, with five seats allocated to MOL, three to the government, and one to the employees. The Supervisory Board chair is designated by the government.

The Management Board has six members, of whom three represent the government and three MOL, while MOL nominates the Management Board chair, who has a casting vote.

The master gas business agreement provided for the sale of the Okoli gas storage facility and the gas trading company to the government. In December 2009, the government and MOL signed the first annex to the gas business agreement under which the government's obligation to buy the gas business was delayed until 1 December 2010.

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February the 20th, 2021 - The INA-MOL saga has oulived both the Agrokor (remember that?) and the fighter jet purchase sagas, and the Hungarians are now wanting much more than Croatia has to offer in that regard.

As Poslovni Dnevnik/Darko Bicak writes, the Hungarian MOL confirmed recently that talks with the Croatian Government about the INA-MOL saga, more precisely on the sale of a controlling stake in INA are continuing, and Bloomberg and Hina both quoted MOL CEO Jozsef Molnar as saying that their views on the price of that stake were "quite far apart".

In a recent conversation with analysts, held after the announcement of MOL's business results for last year, it was said that MOL was never against the agreement, but that wanted to sell its stake in INA at a price that would properly compensate it for its investments in the Croatian company.

If you haven't followed the INA-MOL saga in detail, the Hungarian MOL is otherwise the largest individual shareholder of INA, as it holds 49.1 percent of INA shares (4,908,207 shares), while the Croatian state holds 44.8 percent (4,483,552 shares), and private and institutional shareholders hold 6.1 percent of shares (608,241 shares).

Back in early February this year, Minister of Economy and Sustainable Development Tomislav Coric said that talks were underway with MOL to buy out its stake in INA and that the whole story about the Croatian oil company should not be prolonged beyond the second half of this year.

At a press briefing held on February the 10th, he said that a series of meetings had been held to buy MOL's stake in INA and that the government had made its offer to buy MOL's stake in INA back in November last year, without providing any further details about the offer.

“Over the next few months, let's say over four to five months, we're going to have to know exactly which direction has been chosen. If the transaction is needed after that, it will all take some time,'' said Coric.

Coric also said that the direction that the Croatian Government doesn't support and which is not optimal for Croatia is to maintain the status quo, while from the beginning they've wanted an agreement to be reached between the Croatian Government and the Hungarian side on the purchase of shares in INA.

The latter direction potentially includes a third party, in the sense that the Hungarian side leaves the ownership of INA entirely and is replaced by someone else. In addition, if the Hungarian side is ready to sell its shares in INA, there is an option for Croatia to buy them itself, ie through an arrangement of legal entities from Croatia, which would certainly, at least in one sense, affect the increase of public debt, which was not the Government's wish.

As a third option, if no agreement is reached on the purchase price in the INA-MOL saga, he stated that the agreement would then in the direction of redefining the relationship between the partners within INA, in a way that would see a balanced relationship between the two shareholders, including positions in the company's management, with all of the accompanying obligations and rights implied.

It's worth mentioning that back at the end of 2016, Prime Minister Andrej Plenkovic announced that the Croatia Government had decided to buy MOL's entire stake in INA, after Croatia lost the lawsuit against MOL before the arbitration court of the United Nations  UN) Commission for International Trade Law in Geneva.

An investment advisor in that transaction, the consulting company Lazard, presented a preliminary report on the in-depth survey of INA's business and its value in June last year, and in September 2020, a final report on the assessment of INA's value was made.

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ZAGREB, Aug 26, 2020 - Economy Minister Tomislav Coric said on Wednesday INA's decision to lay off 250 workers was a business decision, and that INA recently submitted a proposal to the Strategic Projects Commission to declare the Sisak biorefinery a strategic project.

Asked by the press to comment on the announcement that 250 INA workers would lose their jobs, Coric said there was no satisfaction if people lost their jobs at the end of a process of transformation, but that INA's business decisions of several years ago were going in that direction.

"The thing that we can express satisfaction about, is that the workers are leaving with relatively favorable severance packages."

The oil company said earlier this week that, given the circumstances of operating during a pandemic, the INA Group began organizational changes and that the restructuring would cover a maximum of 250 workers. This news has caused great concern in the town of Sisak and the Sisak refinery, whose workers have warned that the layoffs would halve the refinery's staff.

Asked about the layoffs, Coric said the company's direction was its decision and that the global oil business was in trouble because of the coronavirus and other circumstances.

He said he was pleased that INA's proposal to declare the biorefinery in Sisak a strategic project, was recently submitted to the Strategic Projects Commission.

We are pleased about that because I think that the direction which INA is taking in fact - a sustainable, green direction - is the right one, Coric added.

INA council to discuss Lazard's final report soon

The minister said the government received Lazard's final report on INA. The company is the government's advisor on the possible buy-back of MOL's stake in INA.

He added, however, that the make-up of the council on negotiations with MOL on the possible purchase changed last week. "In the weeks ahead, that report will be presented to the council members and then we will go a step further."

Asked if the political decision to buy back the stake was still on, Coric said the government decided to do that in 2016 and that the decision was confirmed in the HDZ's platform for this year's parliamentary election.

"We will try to enter into talks with the other side, present our offer and try and restore Croatia's ownership of INA."

A member of the press remarked that consultants said the buyback was not worth it. Coric said that he did not have that information.

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More on MOL’s plans with the Croatian national oil company.

Prime Minister Plenković is in talks with Hungarian Prime Minister Orban about buyback of MOL’s share in INA.

Prime Minister Plenković speaks about INA and other issues.

It seems that most people do not trust government’s claims about supposed national interest.

Unfavourable arbitration ruling means that Croatia will have to cover most of the costs.