October 16, 2017 / 11:31 AM / 2 months ago

Croatian police detain six former executives at Agrokor

ZAGREB (Reuters) - Croatian police arrested on Monday six former senior executives Agrokor during a series of police raids in an investigation into alleged financial irregularities at the heavily indebted food and retail conglomerate.

The state prosecutor’s office DORH said in a statement the investigation targeted 15 individuals “suspected of economic crimes and fraud”. Local media reported that some 300 police officers were engaged in the operation.

Agrokor’s former deputy finance and strategy president Ivan Crnjac, the ex-supervisory board member and top aide of its owner Ivica Todoric Ljerka Puljic, as well as the board member Tomislav Lucic, were among those arrested, the state news agency HINA said.

The police also detained Agrokor’s former management members Piruska Canjuga and Damir Kustrak, as well as its former vice-president Mislav Galic.

Todoric’s lawyer, Jadranka Slokovic, said that his residence was also raided but could not provide any more details.

“The arrest of Agrokor’s former executives is the start of a political showdown with Todoric,” she told HINA.

Agrokor, the biggest employer in the Balkans with around 60,000 staff, was put into state-run administration in April after suffering a liquidity and debt crisis.

Todoric said in a blog post on Monday he was not currently available but was willing to put himself at the disposal of the judiciary and a parliamentary commission. He denied any wrongdoing by himself or his associates.

Croatian lawmakers approved the appointment of a parliamentary commission to investigate how Agrokor ran into trouble, after crisis manager Ante Ramljak said he had pressed for criminal charges against those responsible for financial irregularities.

An audit ordered by the company’s state-appointed management and performed by PricewaterhouseCoopers (PWC), also showed a net loss in 2015 of 3.6 billion kuna ($565 million) against a net profit of 1.2 billion kuna released by the previous management.

In the audit the value of Agrokor’s net worth for 2015 and 2016 was reduced by 22 billion kuna.

Agrokor has yet to say how much it owes. Creditors include suppliers, bondholders and banks, with the biggest portion of debt, around 1.1 billion euros ($1.30 billion), held by Russia’s Sberbank, creditors have said.

($1 = 6.3667 kuna)

($1 = 0.8473 euros)

Reporting by Maja Zuvela; Editing by Jeremy Gaunt, Greg Mahlich

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