Croatian Government Pauses Buyback of MOL’s Stake in INA

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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