INA Managers vs. MOL: “All Out War”

Initiated by the 3 Croatian Management Board members of INA, an extraordinary management board meeting was held this week to discuss their proposal to align INA’s management procedures with Croatian legislation.  The Croatian board members, representing the Croatian shareholders, consider INA’s management structure to be against Croatia’s corporate management act, since the company is operationally managed through their executive management board that is made up of MOL managers, thereby bypassing the management board.  Presently, the Hungarian MOL owns 49.1% shares of INA and Croatian state-owned institutions own 44.8%.  Even though MOL does not have majority control, due to an agreement between MOL and the previous Croatian Government, which is presently an issue of contention in nationally scrutinised corruption cases being processed by the judiciary, MOL essentially has complete management control of the Croatian oil & gas company.  The Croatian managers’ concern is that they are not included in management decisions and, yet, are legally responsible for these same decisions.  There was also an initiative to remove the Chairman of the Board, MOL manager Zoltan Aldott.  Given that the Chairman of the Board’s vote is the deciding vote in the case of a stalemate on the 6 member Board, the proposal was not accepted and voted upon; it was decided that it must be better prepared.  In an INA public statement after the meeting, the company expressed its concern of separating INA managers into  Croatian and Hungarian managers, which the Croatian government later agreed upon.  However, it was widely reported that the meeting was very heated.  It appears that Aldott opened the meeting by requiring all board members to remove their mobile phones, further inflaming the aura of distrust.  This is the continuation of management struggles and distrust between MOL and the Croatian Government.  Regardless of their 44.8% shares, the Croatian Government believes that they deserve a more direct management role in the nationally strategic company.  Minister of Finance Slavko Linic (SDP) responded, “MOL can manage INA without the government, but that means all out war with Croatia.”  Chairman of the INA Supervisory Board, Davor Stern, also responded that, “two government ministers (Linic and Minister of Economy Radimir Cacic (HNS) wanted to be named to the Supervisory Board and they can surely take measures to resolve this unacceptable situation.  It is offensive to me as the Chairman of the Supervisory Board and also as a Croatian citizen.”

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