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Mol Falls to Lowest in 2011 After Denied Extradition Report

July 5 (Bloomberg) -- Mol Nyrt., Hungary’s largest refiner, fell to the lowest this year after Hungarian daily Nepszabadsag reported that Croatia had requested the extradition of Mol Chairman Zsolt Hernadi. Croatia’s Prosecutor General denied the report.

The shares dropped as much as 4.6 percent to 19,935 forint, the lowest intraday price since Dec. 22, and traded 3.6 percent weaker as of the 5 p.m. close in Budapest. More than 500,000 shares changed hands, about 380 percent of the three-month average. Mol led a 1.1 percent retreat in the benchmark BUX index.

Croatia’s Prosecutor General today denied a report by Nepszabadsag that an extradition request for Hernadi had been issued. The information “is not correct,” Martina Mihordin, spokeswoman for the Prosecutor General, said today in an e-mailed statement. The article said Croatia wants to question the Mol executive over an alleged payment of 10 million euros ($14 million) to former Croatian Prime Minister Ivo Sanader in exchange for management rights in INA Industrija Nafte d.d.

Mol has been the subject of “unjustified” political attacks in Croatia, Gyorgy Mosonyi, chairman of Mol’s supervisory board, told a meeting with business leaders in Budapest today. The 21.2 percent stake the Hungarian government acquired in Mol this year may help protect the company from the political attacks, Mosonyi said. He declined to comment further on the case.

Persistent Attacks

“I’m concerned that if these attacks persist, INA’s operations could become affected as well,” Attila Vago, an analyst at Concorde Zrt. in Budapest, said over the phone. “As long as these uncertainties remain, Mol’s share price will continue to underperform its industry peers.”

Croatian prosecutors are investigating whether Sanader accepted bribes from Mol’s Hernadi in exchange for control of the INA subsidiary, Croatian newspaper Vecernji list reported last month, citing unidentified officials in Austria.

“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 on June 21.

Hungary’s Prime Minister Viktor Orban said today his government will oppose calls by the Croatian cabinet to change existing contracts between Mol and INA.

Croatia is seeking to review 2003 and 2009 agreements signed by Mol and the former government in Zagreb giving the Hungarian refiner control over INA, Croatian Economy Minister Djuro Popijac said on June 2.

“The selling pressure on the stock in recent weeks may recommence,” because of the Croatian case, analysts at Equilor Befektetesi Zrt. in Budapest led by Akos Kuti wrote in a research report today.

To contact the reporters on this story: Andras Gergely in Budapest at agergely@bloomberg.net; Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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