MOL Calls On Croatian Government to Propose Ideas for INA's Future

The arm-wrestling and crossfire between MOL and Croatian authorities continue, with the Hungarian company calling on Croatia’s Ministry of Economy to come up with proposals regarding the future development of INA.

“Unfortunately, the Ministry once again raised issues of the past, which will be anyway clarified by on-going arbitration processes, whereas no reasonable forward-looking ideas have been presented. Therefore the Minister’s recent media approach can only be understood as an attempt to deflect attention from his recent regulations, which caused over HRK 1 billion damage to INA,” Dominic Köfner, MOL’s Vice President Corporate Communications, said in a note released on Tuesday.

A recent study by Croatian advisors questioned MOL’s contribution to INA’s growth and Croatia’s welfare.

“MOL Group considers this study, never seen by MOL Group, as a disgraceful piece of commissioned art, worth nothing in any independent court of law,” Köfner added. 

The INA Privatization Act passed by the Croatian Parliament in 2002 allowed MOL in 2003 to acquire 25%+1 share of INA, the Croatian oil and gas company, and hence become its strategic partner. The Act was aimed at opening the economy and reducing the Croatian state’s share in INA as part of the policy package recommended by the IMF to facilitate Croatia’s accession to the European Union. 

Tensions began shortly after MOL gained control of INA through its acquisition of 47.16% of INA’s shares on the Zagreb Stock Exchange in October 2008, leaving the Croatian Government with 44.84%. MOL’s right of control was formalized in the First Amendment to the Shareholders Agreement negotiated by MOL and Croatian Government representatives at the end of 2008 and approved in January 2009. It was also approved by the Croatian Competition Agency and the European Commission and came into effect in June 2009. In 2010, MOL further increased its ownership to 49.1% by purchasing shares from minority shareholders.