Jean-Francois Ott, chief executive of the Luxembourg-based Orco Property Group, which is the majority owner of the Croatian hotel company Suncani Hvar, said in an interview with EuroBusinessMedia (EBM) on Friday that he had sent a letter to Croatian Prime Minister Jadranka Kosor giving the government three months to negotiate a solution to the current situation in Suncani Hvar or he would refer the case to an international court.
"We have been under huge pressure from the inactivity of the CPF (Croatian Privatisation Fund). So today I have filed a Notice of Dispute to the Prime Minister of Croatia. This document, I believe, is on her desk right now. They have three months to negotiate with us and find what I hope will be an amicable solution, or we'll go to international court," Ott told EBM, stressing that the CPF had failed to meet its obligations.
The Croatian government confirmed receipt of the letter.
"The letter has arrived and Prime Minister Jadranka Kosor has read it. The Deputy Prime Minister for Economic Affairs and Chairman of the CPF Board, Petar Cobankovic, will receive Mr Ott early next week," government spokesman Mladen Pavic told media on Friday.
Ott said that Orco had been investing in central and eastern Europe for the last 20 years and that it had invested over 65 million euros in Croatia in the last five years, becoming the majority owner of Suncani Hvar, which is based on the southern Croatian Adriatic island of Hvar.
"We have invested 65 million euros in the first place - why would we steal from ourselves. It makes absolutely no sense," he told EBM.
Ott was detained in Zagreb on Tuesday for questioning by police. He said that the purpose of the police interview was to exert pressure because the day before, during the annual general meeting, the CPF "did not vote in favour of our restructuring plan".
Ott told EBM he felt discriminated against as a foreign investor in Croatia, adding that he hoped Orco and the CPF would find a solution over the next three months.
"If after three months a solution has not been found with the government, it's obvious that it will go to international court and then we will have professionals who will study the case and decide whose responsibility it is and how to protect our 65 million euros of investments," he said.
"We have done a good job, people can go to Hvar, they can go check, the investments were made with passion and with quality," he concluded.
On Tuesday, the police in the southern coastal city of Split pressed charges against six people on suspicion of embezzling HRK 16 million from Suncani Hvar, saying that they had breached business regulations from 2005 to 2008 and incurred unnecessary costs in order to acquire unlawful gain for companies within Orco Property Group.
Orco Group is the biggest shareholder in Suncani Hvar with a 55.5 per cent stake, while the Croatian Privatisation Fund has a 31.7 per cent stake. Suncani Hvar employs 356 people and faces accumulated losses of some HRK 400 million.
