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Southeast Europe
April 27, 2018 www.intellinews.com I Page 16
investigated in Croatia in connection with the financial irregularities at Agrokor. In October last year, Croatian police raided Todoric's house and several former executives from the company were detained.
At a hearing on April 10, Todoric’s attorney claimed that the proceedings against the Agrokor founder were politically motivated. From his outspoken blog, the fugitive tycoon has repeatedly railed against the Croatian government, who he accuses of illegally taking over his business empire.
Todoric has harshly criticised the legislation on the special administration at Agrokor — the so- called Lex Agrokor, which came into force in April 2017. The emergency law covers assistance to systemically important companies that cannot pay their debts, applying to companies with liabilities of more than €1bn that employ over 5,000 people. Todoric has claimed that by adopting this law, Croatia violated several provisions and fundamen- tal principles of EU law.
From their side, government officials and the emergency management at Agrokor say the group was close to collapse at the time it was taken under government control, and there was no money in the bank to pay its tens of thousands
of employees.
One of Croatia’s richest businessmen, with a Forbes estimated wealth of $499mn in 2016, Todoric started off his career growing and trading flowers back in 1976. His company expanded and in 1989 the joint-stock company Agrokor was registered. The company continued to expand and in 2013 it signed an agreement to purchase 53.1% of Slovenian retailer Mercator.
In setting up his food and retail giant, Todoric is said to have benefitted from post-war Croatia’s large-scale privatization, when state-run compa- nies were sold cheap through shady deals, and he was also helped by his relations with government officials when Franco Tudjman was in power. This allowed him to buy the 16th century Kulmer Cas- tle in Zagreb and live a lavish lifestyle — among the assets put up for sale by Agrokor’s emergency management are a Riva 85 Opera yacht and the €7mn Villa Castello.
However, the debt-fuelled expansion of Agrokor finally came to an end, and the group suffered
a run on its bonds in early 2017, after which it
was put under emergency management. After months of negotiations, representatives of the interim creditors council of Agrokor, the suppliers’ association and Russian lender VTB finally signed an agreement in principle on the key elements of a debt settlement deal.