Former Economy Minister Publishes Book on Agrokor Affair

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ZAGREB, October 29, 2018 – Former economy minister Martina Dalić said on Monday there had been no intention of conspiracy or corruption in dealing with the crisis in the ailing Agrokor conglomerate. She was speaking at the launch of her book “Agrokor: The Collapse of Crony Capitalism”.

Attending the launch were many politicians, including Prime Minister Andrej Plenković and several ministers, as well as business people, unionists and lawyers who participated in the preparation of a law dubbed Lex Agrokor.

Dalić said she wrote the book to explain what was happening when the government was faced with the crisis that broke out in the private food and retail conglomerate. “There were numerous lies in the public sphere by those who wanted the emergency administration process in Agrokor to fail.”

The government would not lend Agrokor 300 million euro, she said, adding that there had been no Borg group, conspirators or corruption in the government. Borg was the nickname of an informal group of experts working on the law on extraordinary administration in companies of systemic importance, dubbed Lex Agrokor.

Workers did not protest outside the government, and the government did not provide collateral at taxpayers’ expense, said Dalić. “I resigned over events that never happened. There was no secret group, but the government’s stability was shaken because of emails that appeared in the public sphere. Although it was a set-up, the prime minister and I agreed that I should resign, although I’m not guilty of what I’m being accused of,” she said.

The growing prospects of the success of the emergency administration triggered off more and more rumours and fabrications as well as lies spread in the public by those who wanted the administration to fail, she said, reiterating that no secret group had ever existed,

By refusing to give a loan of 300 million euro to Agrokor founder and owner Ivica Todorić, the government showed that there were no entrepreneurs who were given preferential treatment, and therefore this book is entitled “Agrokor: The Collapse of Crony Capitalism”, she said.

As for controversies surrounding the process of salvaging Agrokor, Dalić cited the case of the Alix Partners consulting company that hired as subcontractors three companies whose owners or co-owners had participated in a task force that the government consulted during the outbreak of the crisis. Hiring those subcontractors caused harm to the credibility of the emergency administration process and raised moral and ethical questions which had not cropped up before, she said.

I am personally sure that during the whole process there were a lot of ambiguities and errors and things which both emergency administrators would do differently now if they started this process anew. But decisions are made in real time, and those decisions were adopted in extreme circumstances, particularly at the very start of the process, she said.

HNB Governor: Central bank started dealing with Agrokor issue in 2012

Addressing the event, Croatian National Bank (HNB) Governor Boris Vujčić said that the HNB was the first to actively address the issue, already in 2012, and that in the end the whole Agrokor problem was solved with a settlement deal which was upheld this past Friday by the High Commercial Court.

In 2012, the HNB noticed that local banks were exposed to Agrokor to a level that exceeded the legislative frameworks.

He also warned that the amount of Agrokor’s debt accounted for 7% of the national GDP, which was seven times more than in the case of the Italian Parmalat.

The real threat for the state budget would have been if banks had fallen victim to the Agrokor crisis due to excessive exposure, and in 2012 the HNB issued an injunction, demanding that 16 banks reduce their exposure to Agrokor, the governor recalled.

Ramljak: There was no Borg group

The former emergency administrator in Agrokor, Ante Ramljak, told reporters before the launch he read the parts of the book that were about him. “I think everyone involved in the most complex economic problem which happened in Croatia at that time can be proud of what they did and we can all be glad that there has been no major damage,” he said in response to questions from the press.

Prime Minister Plenković was the first person who had to take care of the problem, Ramljak said, adding that questions about what happened later and why Dalić had to resign as economy minister should be addressed to her.

He would not answer questions about the Borg group and leaked emails, saying only that there had been no such group. I think those are fabrications, said Ramljak. He added, however, that he did send one email mentioning the group on Easter 2017 when he realised that they had rescued Agrokor with one financial injection. “I sent that email and the Borg group is mentioned only in that email.”

He would not say what he thought of the president’s and the prime minister’s earlier calls that the consultants hired for Agrokor return their fees.

Ramljak became Agrokor’s emergency administrator after the adoption of Lex Agrokor, which aimed to protect the sustainability of business operations of vital companies. The law was adopted on 6 April 2017. Of 131 lawmakers attending that session, 83 voted in favour, 46 were against and two abstained. He took over management on 10 April and was emergency administrator until late February 2018.

Škegro: The bulk of the media created scandals out of nothing

Former Finance Minister Borislav Škegro, answering reporters’ questions before the launch, called out the bulk of the media for “creating scandals out of nothing, out of non-existent facts and lies.” He said Dalić resigned as economy minister when she saw that her staying in office might endanger the ultimate goal, reaching a successful settlement for Agrokor. He said Agrokor creditors “fared much better” with the settlement that was eventually reached “than they would have in any alternative scenario.”

Škegro said Dalić’s book showed that Lex Agrokor had between 40 and 50 authors, including members of the MOST party, which was part of the ruling coalition at that time, and MPs. “What’s important is that there were no scandals, no groups, no criminal organisation, no plan to steal,” he said, adding that “nobody in their right mind would steal debts worth billions.”

For more articles about the Agrokor affair which almost brought down the government and the economy, click here.

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