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MOL to review portfolio, could sell INA shares

Issues

A cabinet decision yesterday will result in the Hungarian government asking management of Hungarian oil-and-gas company MOL to review its portfolio and, if necessary, to take preparations to sell its shares in Croatia-based INA, the Government Information Centre (KIK) has reported.

The government has instructed the justice minister and top officials of the Hungarian National Asset Management Company (MNV), which manages the ownership rights of state-owned shares in MOL, to assess the possible legal steps that could be taken to address accusations against Hungary and MOL in connection with a case involving MOL and INA, KIK said.

According to the government statement, “The continuous political campaign against MOL in Croatia, the Croatian finance minister’s public threat against the biggest investor in the country, and Croatian justice bodies’ procedures against some MOL managers point to the intention to use tools outside of the economic sphere to exert pressure.

“These methods are unacceptable in the European Union; Hungary cannot allow these steps without an answer.”

The cabinet took the decision after reports in the Croatian media that local police had issued an arrest warrant for MOL CEO Zsolt Hernádi. Hernádi is suspected of bribing former Croatian prime minister Ivo Sanader in exchange for management rights in INA. A Croatian court sentenced Mr Sanader on corruption charges in November 2012.

KIK affirmed yesterday that MOL had fulfilled its obligations in the agreement to the letter, investing almost EUR 3 billion in INA in the past years, while the Croatian state had only partially or not at all met its own commitments.

The Hungarian government has, until now, viewed the differences between the Croatian state and MOL as a business dispute between shareholders, but such events have taken place in the past days that make it clear to the government that it is not only about this: “In Hungary, too, it happens that the state buys out an earlier investor, but there is an established way to do this, acceptable to all parties ... There is a graceful way to part ways,” read the KIK statement in part.

MOL rescued Croatia's most important company during the crisis, after which an attempt is being made to intimidate MOL with unbusinesslike tools and get back management rights in INA without a buyout, KIK argued, and the government considers this practice unacceptable and will speak out against this affront to the rule of law.

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