Mol ‘Rejects Every Allegation’ in Croatian Bribery Case

Mol Nyrt., Hungary’s largest refiner, rejected allegations that its Chairman Zsolt Hernadi bribed Croatian Ex-Premier Ivo Sanader to help gain control over INA Industrija Nafte d.d.

“There has not been any payment, or agreement on any possible payment, with not a single one of the players and decision-makers of Croatian politics,” Mol spokesman Domokos Szollar said in an interview today. “We will take strict legal measures against all who make or spread such allegations.”

Croatian prosecutors are investigating whether Sanader accepted bribes from Hernadi in exchange for control of INA, Croatian newspaper Vecernji list reported today, citing unidentified officials in Austria. The probe is focusing on whether Sanader allegedly accepted 10 million euros ($14 million) from Mol during negotiations in 2008 and 2009 in exchange for rights to manage the Croatian refiner, according to the Zagreb-based newspaper.

State Prosecutor spokeswoman Martina Mihordin declined comment when reached by phone today. Calls to Vuk Djuricic, spokesman for the Office for Suppression of Corruption and Organized Crime, were not immediately answered.

“Neither directly nor indirectly, neither before nor after the birth of the shareholders’ agreement” was there any payment, Mol’s Szollar said. “Mol strictly rejects every allegation and accusation regarding this issue.”

Sanader’s Lawyer

Sanader’s lawyer didn’t immediately answer phone calls placed today to his cell phone to respond to the Vecernji report. Sanader, though his lawyers, has repeatedly denied any wrongdoing. He is currently in an Austrian jail in Salzburg awaiting extradition to Croatian on suspicion of corruption involving siphoning funds from state companies.

The Hungarian refiner has 47.47 percent of INA, while the Croatian government holds 44.84 percent. Tensions between Budapest-based Mol and Croatian authorities increased after the Hungarian company in December made an offer to purchase the outstanding shares in INA. Croatia claimed it wasn’t notified of Mol’s intention before the offer.

Mol shares dropped 3.19 percent to 21,300 forint by 2:55 p.m. in Budapest. INA’s shares have been suspended from trading on the Zagreb stock exchange since May 9 as the market regulator claims Mol has not sufficiently explained its trading activities in recent months.

‘Witch-Hunting’

The current news “appear to be strongly influenced by politics and may involve some ‘witch-hunting’ elements,” Robert Rethy, an analyst at Wood & Co. brokerage, said in a comment. “Such news, if confirmed, is clearly not positive and creates additional headaches for Mol and extra diversions away from the core operations and management of the group.”

Mol has invested $3.8 billion in INA’s refineries and production since 2003, when it first bought into the Zagreb- based refiner.

Croatian government said on June 2 it will seek talks with Mol to review 2003 and 2009 agreements that gave the Hungarian refiner control rights over INA. The government today added Justice Minister Drazen Bosnjakovic to its team of negotiators with Mol, which also includes the economy and finance ministers.

In September, lawmakers opened an inquiry into how the Sanader-led government in January 2009 gave control of INA to the Hungarian company under undisclosed terms. The inquiry over the shareholding agreement closed without a conclusion, sending a report on their investigation to the Prosecutor General’s office.

To contact the reporter responsible for this story: Jasmina Kuzmanovic at jkuzmanovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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