State Provided Previously Undisclosed Indirect Loan to Agrokor

Total Croatia News

Deputy Prime Minister Dalić has called on the Prosecutor’s Office to investigate.

“This case is just one of the examples that demonstrate inappropriate and sometimes very vague business practices which Agrokor used during the time of Ivica Todorić’s administration, which have led to the bankruptcy of Agrokor. I expect the institutions, the Croatian Financial Services Supervisory Agency (HANFA), the Office of the State Prosecutor (DORH) and others, to clarify whether these practices were legal,” said Deputy Prime Minister and Economy Minister Martina Dalić on Tuesday, reports on 25 July 2017.

She was referring to the news that additional 40 million kunas of the state are currently “frozen” in Agrokor. The money was loaned to the company by Nexus Ulaganja, an investment company founded by Nexus Fund, in which one of the investors and founders is the state through the Croatian Bank for Reconstruction and Development (HBOR).

The story begins in July 2016, when Nexus Fund, more precisely its board of trustees, which included an HBOR representative, decided to invest more than 50 million kunas in Zagreb-Montaža company. In order to implement this decision, Nexus Fund founded the Nexus Ulaganja investment company. However, instead of Zagreb-Montaža, most of the money ended up as a loan to Agrokor. Within a few months, a total of 47 million kunas was loaned to Agrokor, with an interest rate of 6 percent. So far, only seven million kunas have been returned.

The HBOR allegedly did not know that the money, instead of in Zagreb-Montaža, would end up in Agrokor, since the investment did not proceed directly from Nexus Fund, but from the newly-founded Nexus Ulaganja company. The HBOR found about the lost money in May this year, when it became apparent that, after the initiation of the extraordinary administration procedure, Agrokor would stop paying its debts.

In the meanwhile, Nexus Ulaganja transferred its claims to Zagreb-Montaža. At one point, Zagreb-Montaža decided to force Agrokor to repay its debt and it even allegedly succeeded in obtaining such decision from the Zagreb Municipal Court. However, the enforcement was stopped after the opening of the extraordinary administration procedure in Agrokor.

In addition to the state and the HBOR, one of the private investors in the Nexus Fund is Todorić’s Konzum. Given that the registration of claims filed with Agrokor’s extraordinary administration has not yet been finished, the question is whether similar cases of interdependence between the state, investment funds and Agrokor will emerge in the near future. According to news reports, HANFA is also investigating this case.

Nexus has refused to answer questions on whether it indeed funded Agrokor and its companies, whether HANFA is currently conducting an investigation, and whether they expect they will be able to save the loan given to Agrokor.

Agrokor said that “the procedure of the examination and determination of all registered claims is underway. After the completion of this process, all relevant information on the established and disputed claims will be published and made available to the public.”

HANFA also did not want to comment. “HANFA is continuously monitoring operations of investment fund management companies and, depending on the results of the supervision carried out and in accordance with its legal authority, takes appropriate supervisory measures and/or submits reports to the competent authorities. However, please note that HANFA does not provide any information on the ongoing procedures nor the names of business subjects which it supervises.”

Translated from


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