A former Deputy Prime Minister and chairman of INA oil company's Supervisory Board, Damir Polancec, told a parliamentary commission investigating INA's privatisation on Tuesday that he believed to have been betrayed by his colleagues in the government and the ruling Croatian Democratic Union (HDZ) party.
Polancec, who has been charged with malfeasance and embezzlement in three cases, made the statement when asked by commission member Josip Leko of the Social Democratic Party (SDP) if he believed that his colleagues had renounced him.
The former Deputy PM asked that his testimony before the commission not be understood as a whim or revenge-seeking.
Speaking of the circumstances under which the shareholders' agreement between the government and MOL was amended, Polancec said that in 2008, when he was appointed chairman of INA's Supervisory Board, the company was facing bankruptcy and the forced collection of a syndicated loan, which was why it owed the state excise taxes.
"INA used all of its resources and revenues to pay its loans," Polancec said, dismissing claims by Deputy PM Ivan Suker that the situation in INA deteriorated only when he was no longer at the helm of its Supervisory Board.
Polancec said that the situation in INA was caused by unrealistic and excessive investment, losses in the gas business and in oil trade, and exchange rate differences.
"All of that was in the remit of the management," Polancec said.
He went on to say that the first act of amendment of the shareholders' agreement was good for Croatia and benefitted INA and the entire economy, because after that, the company was no longer managed by people enjoying political protection, but by professionals.
When asked by commission member Boris Kunst of the HDZ to explain what he meant by political protection, Polancec said that former President Stjepan Mesic was a political patron to the then INA CEO Tomislav Dragicevic, that the Croatian members of the company's management answered to the Croatian government, and MOL's representatives to the Hungarian government.
He stressed that changes to the shareholders' agreement brought Croatia exceptionally important rights that had not existed in the original agreement.
He explained that the amended agreement incorporated a two-year ban on the sale of INA shares, the right of pre-emption in case MOL decided to sell its shares in INA, and the right of pre-emption in case of an uncontrolled takeover of MOL.
As for the original shareholders' agreement from 2003, Polancec said that it had given MOL too extensive management rights considering the size of its stake (25 percent plus one share), but stressed that the agreement could not be terminated because it would have had negative consequences for Croatia.
