Interview with Finance Minister Zdravko Marić

Total Croatia News

The person at the centre of the government crisis speaks.

Zdravko Marić refused to resign as Minister of Finance after being criticized for allegedly favouring Agrokor and not warning the government about problems in the company in which he worked for years before becoming a minister. Prime Minister Andrej Plenković on Thursday dismissed MOST’s ministers for not supporting Marić and voting against him. Zdravko Marić gave an interview in which he spoke about the latest events, reports Jutarnji List on April 30, 2017.

SDP has initiated a motion of no confidence against you as the Minister of Finance. How do you respond to criticism and allegations against you?

First of all, I would like to thank Prime Minister Andrej Plenković and my colleagues from HDZ on the political, professional and human support they have demonstrated towards me. I will immediately say that I am not thinking about leaving, because there is no real and justified reason. The fact is that I worked for Agrokor from 2012 to early 2016, when I was appointed as Minister of Finance in the government led by Prime Minister Tihomir Orešković. I started my professional career at the Institute of Economics, where I spent more than four years. Then I worked for six years at the Ministry of Finance, first as assistant minister, and then as state secretary. As you know, I have been the Minister for just a little over a year.

As for the alleged conflict of interest, the fact that I worked in Agrokor for four years does not mean automatic disqualification from being able to perform certain duties in the government. Since I was appointed, I have had no connection with Agrokor except that I care about the stability of the Croatian economy. I am not a shareholder in any of Agrokor’s subsidiaries, I have no contract with Agrokor which would allow me to return to any part of the group after my term is over, and none of my family is employed by any of the companies from the Agrokor system. I do not know why it is so difficult to imagine that someone would want to pursue a public office solely for the general good, without having any hidden motives or interests.

Regarding the lack of support from MOST’s ministers, I have to say that I sincerely regret it. I am particularly sorry that MOST has made the decision to support SDP’s proposal without giving me the opportunity to answer all questions.

You are criticized that, as Agrokor’s executive director of strategy and capital markets, you should have known about Agrokor’s financial statements and possible irregularities in them, as well as that, as a former “insider”, you should have warned the government about the danger of a possible bankruptcy of Agrokor?

I was the executive director of strategy and capital markets and preparation of financial statements was not within my sphere of activity. Namely, I was part of the team responsible for international financing, investor relations and mergers and acquisitions, and what I personally covered in talks with investors was the macroeconomic situation in terms of analyzes and projections for Croatia and the region and the political situation in the country and the region. I was not a member of the board of directors, but one of 25 executive directors in Agrokor, and I would receive financial reports when they were already prepared and published. I had no reason to doubt their validity.

Regarding the situation in Agrokor in the past year, I knew about it only from publicly available indicators and assessments of rating agencies. Until January of this year, rating agencies pointed to certain problems in refinancing of Agrokor’s obligations, however they never questioned Agrokor’s liquidity for the next twelve months.

What are the possibilities for the crisis in Agrokor to influence the wider economy?

This is a serious question that I was asked last week in the United States by representatives of international financial institutions and investors. It is difficult to make an assessment because right now we do not have enough information. Nevertheless, we see that the government has adopted a special law and started solving the liquidity problems. The second phase will including solving the problem of restructuring of Agrokor in order to permanently eliminate the possibility of negative impacts on the economy.

However, it is clear that just the existence of the potential for major crises prompts other companies to stop some of their business activities in order to be ready for a possible financial shock in the event of negative developments in Agrokor?

Yes, it is certain that this could lead to a certain slowing down of investment activities in a part of the economy. We are following this closely. Ahead of us is a tourist season that will probably be exceptionally good, and the role of Agrokor and its companies with this regards is important. We are aware that we are talking about billions, and that for some small suppliers and companies even several hundred thousand kuna or one million or two million kuna are important.

One of the accusations against you is that in April last year you prolonged the application of the Law on Factoring, which gave the factoring companies another nine months to adjust to the law. This has allegedly prevented the supervision of the factoring market, in which the Agrokor Group represents 70 percent of business?

The Law on Factoring was passed in August 2014 and factoring companies were given 12 months to adapt to the law. In August 2015, on the eve of the parliamentary elections, no factoring company had yet adjusted to the law, and the then SDP government adopted a decision to prolong the adjustment period to March 2016. After I was appointed Finance Minister in the government of Tihomir Orešković in January, I focused on the drafting the state budget and the convergence programme, which is a medium-term fiscal policy framework crucial for our exit from the excessive budget deficit procedure. Since out of the 13 factoring companies only three had adapted at the time, a recommendation was made to prolong the deadline once again, in order to save jobs in the factoring companies. The proposed amendment which extended the adjustment deadline was passed by a huge majority of MPs, including MPs from SDP and other opposition parties. No one was against this proposal, and only seven MPs abstained.

There is also an allegation that the amendments to the General Tax Code, which came into force early this year, mean that the list of tax debtors would not be published four times a year, but just once, which was interpreted as a concession to Agrokor?

This is another absurd insinuation. That was not done to favour Agrokor, but on the request of the Tax Administration, solely in order to reduce the costs of administration, due to the fact that the public’s interest in accessing the Tax Administration’s website where these data were published was drastically reduced. In addition, Agrokor’s companies did not meet the legal criteria at that time to even be included in the so-called “list of shame”. At this point, I cannot say whether Agrokor has remained in debt to the state when the extraordinary administration procedure was launched, but it can be assumed that part of the tax obligations for the previous month has not been paid.

One of the allegations which is not connected with Agrokor relates to the loan you received from the Croatian Postal Bank (HPB) in 2010, at the time when you served as the state secretary at the Ministry of Finance, and you were chairman of the HPB supervisory board. Pursuant to the HPB crediting regulations, supervisory board members are entitled to preferential interest rates used by company employees, and you had the option to use them. But was it proper that you, as a state official, took advantage of this privilege, taking into account the fact that the Law on the Prevention of Conflict of Interest states that state officials should not receive any fee or gift from the company in which they serve as supervisory board members?

When I became the Finance Minister early last year, I published my entire asset report, which included this loan, and I again reported it at the end of last year after the reappointment. So, I did not hide anything and I really do not think I did anything contrary to the law. If there really was something controversial about this loan, I am sure that someone would have spoken about the subject before. After all, the bank’s governing bodies would not have approved the loan, nor would I have accept it, if it were not in compliance with the applicable regulations.


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