Via Financial Times

Former Croatian premier Ivo Sanader and the head of Hungarian oil group MOL have been found guilty of corruption by a Zagreb court, in a case that has lasted for nearly a decade.

The case relates to the privatisation of Croatian state energy group INA in 2009.

A court in Zagreb ruled on Monday that Mr Sanader was guilty of accepting a bribe of €10m from MOL chief executive Zsolt Hernádi in exchange for MOL being awarded a substantial stake in INA and more seats on its management board.

MOL now owns 49 per cent of INA, while the Croatian state owns 45 per cent.

Mr Sanader received a prison sentence of six years, while Mr Hernádi received two years. Neither of the men were present in court to hear the verdict, Mr Sanader due to illness and Mr Hernádi because he lives in Hungary and has fought extradition to Croatia despite Interpol — the body that facilitates international police co-operation — issuing a warrant for his arrest.

The ruling is the first step in a series of court stages and neither man will have to start serving their sentences until the appeals process has been exhausted.

Both Mr Sanader and Mr Hernádi deny wrongdoing. MOL Group said in a statement that Mr Hernádi “continues to have the full support and confidence of the MOL Group boards”.

A previous conviction against Mr Sanader for bribery and illegal profiteering in relation to the INA privatisation was overturned by Croatia’s constitutional court in 2015 due to procedural errors. This is the first time Mr Hernádi has been brought to trial.

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His lawyer Michael O’Kane called the verdict a “travesty” and said that a team of “senior independent trial monitors concluded that this case was riddled with unfairness, bias, incompetence and possibly worse”.

In a statement, MOL Group noted that an investigation by the Hungarian public prosecutor in 2011 had cleared Mr Hernádi, and that a UN trade arbitration panel had decided in favour of MOL and “explicitly concluded” that allegations of bribery were false. 

The question of INA’s ownership is politically sensitive in Croatia. It was one of the largest companies in the former Yugoslavia before its collapse and even after the war in the 1990s it was a big employer in the newly independent country.

But since then the privatisation scandal has become an emotive issue for Croatians who are fed up with the country’s tumultuous transition to capitalism, and a cause of diplomatic tensions between Croatia and Hungary. 

The Hungarian government owns 25 per cent of MOL Group. Hungarian premier Viktor Orban has previously suggested that Croatia should buy back its INA shares to end the protracted cross-border row between the two EU members.

Delivering the judgment on Monday, president of the Zagreb court Ivan Turudic condemned Budapest’s refusal to honour the arrest warrant for Mr Hernádi, saying: “There is an active European arrest warrant for Hernádi and Hungary should act accordingly.”

A MOL spokesman said the group’s strategy towards INA “remains unaffected”. Two weeks ago MOL announced that it was investing $600m to upgrade an INA refinery in the Croatian coastal city of Rijeka. 

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