ZAGREB, June 7, 2018 – U.S. Ambassador to Croatia W. Robert Kohorst confirmed on Wednesday that, to avoid unfavourable scenarios while trying to reach a settlement for the ailing Agrokor conglomerate, not one group should have more than 10% of voting rights in the company.
Speaking at a working lunch organised by the American Chamber of Commerce (AmCham) in Croatia, Kohorst underscored that the primary aim is for Agrokor to become successful after a settlement is reached and restructuring has been implemented. However, Kohorst considers that. even though it seems that a settlement will be reached, not one individual group should be allowed to have more than 10% of the voting rights in the conglomerate. He said that would leave room to avoid consequences of poor decisions by one individual or group while joint decisions by a larger group of people with financial stake can make better decisions.
He added that the government should concentrate on preventing and reducing the risk of concentration of ownership and voting rights and added that that can be done by limiting voting rights of ownership shares, by complex structured management boards or other procedures that enable companies to make success and not to become the subject of certain risky behaviour.
He said that the example of Agrokor should help the state to better examine relations toward large and strategic assets and whether their number is appropriate considering the size of the country. When you have large conglomerates that control large parts of the economy, regardless of whether they are owned by the state or privately, they can halt dynamic growth which Croatia needs, Kohorst said.
Asked about the increasing influence of the capital from east and southeast European companies in Croatia, Kohorst said that Russia’s Sberbank has a significant influence and that it is obvious that it will be one of the largest shareholders in Agrokor.
Asked about the US’s interest in the future LNG terminal on Krk, Kohorst said that the interest is reflected in achieving energy diversification in Southeast Europe. He considers that that would ensure greater supply security for Croatia, Hungary and other countries in the region. He added that there was a possibility for the United States to sell a certain quantity of natural gas to that terminal however the focus is not on that but rather stability in the region.
Kohorst said that Croatia has significant potential and several comparative advantages such as security, EU membership and a qualified and rather affordable labour force. However, Croatia’s further development and stronger prosperity requires better market conditions and a more favourable business climate, and the government has to become a partner with the commercial sector.
The diplomat added that in that regard it was necessary to reduce regulations, to have an administration that is cooperative, followed by a rational, independent and timely judiciary system that guarantees settlements, that is transparent and efficient in issuing working permits, among other things.
He added that he hoped Croatia would soon complete its transition to a complete market economy and that it would resolve the over inflated public share of ownership of state assets. He underscored that a strong and developed country is desirable and a good partner for the US, and that creating new jobs guarantees that young people will remain in Croatia.
