Agrokor’s owner Ivica Todoric,
leaves Westminster Magistrates Court in London,
Britain November 7, 2017.
Photo: REUTERS/Simon Dawson
High corruption risks and practices, political patronage and nepotism, and inefficient bureaucracy rolled over from former communist days are among the challenges that Croatia has not truly dealt with yet. To deal with that lustration would be an absolute essential. Corruption and bribery are especially prevalent in the judiciary, public procurement, and the building and construction sector. While the primary legal framework regulating corruption and bribery is contained in the Criminal Code and the Corporate Criminal Liability Act, which make individuals and companies criminally liable for corrupt practices including active and passive bribery, money laundering and abuse of functions. Facilitation payments are prohibited, and gifts may be considered illegal depending on their value or intent. The mechanisms and practice of policing and monitoring compliance with the relevant legislation is practically non-existent. Hence, the road to what is there today with the Agrokor concern – too late to save the company or the livelihood of tens of thousand employees.
Media is running flaming hot in Croatia and abroad regarding the Tuesday 7 November corruption and fraud charges arrest at London Met Police of Ivica Todoric, majority owner of Agrokor business concern whose plummeting towards bankruptcy has also been threatening to bankrupt the country as a whole. One wonders, though, how much of this concentrated hype against Todoric has been designed to hide away from the media spotlight and responsibility of those not related to Todoric family or Agrokor staff. How many in the current and past governments, how many currently sitting in the Croatian Parliament have had their fingers in the Agrokor pie since its foundation during the time of former communist Yugoslavia.
How much of this concentrated media and government effort against the Todoric clan (however justified under law and justice) is in effect a ploy to save the government from falling! Friday 10 November is bound to be a day of upheaval and patience generally running very thin as the yet another vote (in about 18 months’ time span) of no confidence in the government jumps onto the agenda for the day’s proceedings. Reportedly the opposition Social Democrats are seeking a vote of no confidence against the HDZ- led government.
As both Social Democrats/SDP and Croatian Democratic Union/HDZ have held government power in Croatia since independence from communist Yugoslavia and, many of their leading individual powerful members had held positions of power in the former communist regime, which institutionalised corruption and theft in that country, one truly cannot trust that Social Democrats’ motives are noble in this. How many thieves and corrupt individuals are they trying to hide, one wonders.
Croatia’s richest businessman Ivica Todoric, the founder and owner biggest private food and retail company, the drowning Agrokor that’s been shaking Croatia’s economy for months, threatening to bankrupt the country, was arrested after reportedly handing himself in to the Met Police Tuesday 7 November 2017 in London amid allegations of corruption, fraud. It is alleged that he has embezzled millions from his large retail company, leading it into a massive bankruptcy that is now an issue of national concern in Croatia and the countries around it. Todoric appeared in Westminster Magistrates’ Court and District Judge Richard Blake granted him freedom on 100,000 British pounds ($132,000) bail.
A European Arrest Warrant was issued after the firm collapsed, having amassed debts of over 5 billion euro. Criminal prosecutions have begun in Croatia against 14 senior figures at Agrokor, including Todoric, on suspicions of corruption and forgery. Todoric denies any wrongdoing, is accused of falsifying accounts to hide unsustainable debts estimated at £4.8bn (€5.4bn).
Asked by District Judge Richard Blake whether he consented or objected to the extradition request from Zagreb, Todoric said he would oppose being sent back to his home country, Reuters reports.
Prosecutor Benjamin Seifert, appearing on behalf of the Croatian authorities, told the court Todoric faced three charges back home — false accounting, fraud by false representation and abuse of position — amounting to a total alleged fraud worth about 110 million Euros.
The court heard that there was a worldwide freeze on Todoric’s assets.
“This is extremely serious offending,” Seifert said.
“The context in which I grant you bail is the knowledge that both within this country and throughout the world, your assets are frozen and your ability to obtain money is limited,” Judge Blake said from the bench. “The security is a very small sum in the context of what sums I have heard being spoken of.”
The judge also set conditions requiring that Todoric wear an electronic tag between midnight and 3 a.m., sign in at a London police station three times a week and give up his travel documents.
Agrokor, which began as a flower-growing operation in the former Yugoslavia in the 1970s, underwent a rapid expansion over the past decades that saw it run up debts of about 6 billion euros ($7 billion). The company employs about 60,000 people throughout the Croatia and neighbouring countries and is so large it now accounts for about 15 percent of Croatia’s gross domestic product. Its debt is too large for the government to rescue it without endangering the state’s financial stability including superannuation or pension funds that have invested in the company.
Although Todoric still formally owns 95 percent of Agrokor, the Croatian government, having rushed in a special law known as “Lex Agrokor” a few months ago has taken over management of the company. It is now trying to keep it alive through restructuring and negotiations with major creditors, which include Russia’s Sberbank and VTB bank, to which it owes 1.4 billion euros and who want their money back.
After he appeared on Europol’s fugitive arrest list, Todoric wrote on his blog that he was not hiding and that his conscience was clear.
“As a man whose human rights are deeply violated I have the right to oppose political persecution,” Todoric wrote. “Today, I too am fighting against a corrupt system in Croatia,” he wrote on 6 November 2017, the day before he handed himself in to London Met Police.
Todoric has always claimed that the government illegally took over his company and indicated that he will fight his extradition on the grounds that he is the victim of political pursuit.
Political pursuit, Mr Todoric, has been there always, only before you used it to benefit yourself, to wrongfully create and amass wealth and now you use it to crucify those that helped you in that. Out with the lot of you and your communist heritage – in with lustration! Ina Vukic
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Reblogged this on Brittius.
Thank zou Brittius
You are most welcome, Ina.
Hi Ina, again informative.
The parliamentary inquiry with Stipe Mesic as witness was also interesting. Of course he knew nothing of Agrokor and simply laid the responsibility at the feet of Tudman and his advisers. He went further to discuss on how government firms were sold to private individuals such as Ivica Tordoric and Agrokor . There was no transparency in the process in privatising these firms, and the people in government “choose people who they thought would be able to manage a firm”. This is the only honest thing that he said. Who did they know, people in the Party that’s who they knew.
In a parallel universe (1990-91) Croatia was at WAR, people dying, ethic cleansing of Croatia, with no arms facing one of the largest armies in the world etc etc etc and these guys were “dividing the loot” amongst themselves, that was their priority, privatisation.
Croatians throughout the world were raising funds for the defence of the homeland. All Croatians donated, business people, students and labourers earning $30 per hour working on building sites, parting with their hard earned money saved over 30 years. Placing their time, money and effort in the defence and Love of Croatian people.
It did not occur to the Croatian government then nor now that these people, people who have lived in a capitalist democracy for over 30 years, know what a system of law and ethics mean, would have been far better qualified to take over and make something of these firms, especially the labourers ! These people who have held the torch for Croatian Independence for decades, stood up and lobbied every country on earth to recognise Croatia, provided men, plant and materials to support Croatia during the dark days.
Oh no !! wouldn’t want to do that, send Croatia on the right path to a prosperous future.
I read this artical in context of Croatians living abroad 1990 -91, and think, the Croatian People with no Party connections and Croatians living abroad, we deserve an apology from the Croatian government for wasting our hard earned money and looting public assets during a time of war.
Where did the people of Vukovar fall on the priority list 1990 -91?
I don’t think it made it on the meeting agenda.
Sram Vas Bilo !
Well said Splithead – as to Mesic he never remembers anything that was happening and was crucial while he enjoyed the position of second man in Croatia during the war…the man is a disgrace as politician! The sooner he is out of public picture the better. What a waste of time for the parliamentary inquiry into Agrokor to even let that man through the door let alone ask him questions, everybody else knew his responses would be useless when it comes to truth…
Thank You Arlin