Petrol Management Board Resigns

By , 28 Oct 2019, 08:45 AM Business
Petrol Management Board Resigns Wikimedia - Minale Tattersfield, CC-by-2.0

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STA, 25 October 2019 - The entire management board of energy group Petrol resigned Thursday night "by mutual agreement", capping a day of intense speculation about its fate amidst what media reports describe as a politically-motivated struggle to control one of Slovenia's largest companies.

Long-serving chief executive Tomaž Berločnik stepped down alongside board members Rok Vodnik and Igor Stebrnak, over what Berločnik told the press were "differences in views on strategy" with the supervisory board.

This was today confirmed by chief supervisor Nada Drobne Popović, who said in a release "the management and the supervisors had a significantly different view on the implementation of the adopted strategy".

The company will be led in the interim period by Drobne Popović along with director of strategic cost management Denijela Ribarič Selaković. Also saysing on is the board member representing workers.

The move came after a supervisory board session that had not even been announced; when first speculation appeared yesterday morning, Petrol even went as far as issuing a press release saying the management had no knowledge of a supervisory board session taking place.

Drobne Popović later said the session had been an extension of a previous supervisory board session.

Media were abuzz with speculation about the true reasons for the overhaul at the top of Petrol.

Public broadcaster TV Slovenija thus reported the management and supervisors clashed over a bond issue necessary for the takeover of three energy firms in the Balkans.

And the business daily Finance reported "problems with a project that would significantly alter the image of Petrol" as the cause, though it also suggested this was a cover for what was in fact a politically motivated replacement.

This possibility was also raised by the Manager Association, which issued a statement prior to the resignation warning against replacing a successful board.

"By bringing down a successful management team, those who want to replace them - politicians in power - would send the indirect message that they do not care about social prosperity and the fate of Slovenia's largest company."

It said it was "strongly against a political replacement of the management board as well as political games which all too often damage the economy and society".

It also pointed to the importance of stability and predictability of the business environment and of good corporate management for companies.

The association moreover believes yesterday's decision made no sense in particular in the light of Petrol positive results.

Meanwhile, the Slovenian Directors' Association expressed surprise over the management overhaul, saying that such an extreme step was usually justified.

"A justified reason must exist; if it does not, then this is careless actions," Irena Prijović, the association's executive director, told the STA on Friday.

She could not comment on whether the move was political, but added that if indeed it was, that would be unacceptable.

Chief supervisor Drobne Popović rejected claims she had acted on behalf of political actors and said she had not consulted any politicians.

Prime Minister Marjan Šarec wrote on Twitter yesterday afternoon, before the resignation was announced, that the notion his party wanted to replace the Petrol management was "one of the biggest pieces of disinformation recently".

The government discussed the step at today's correspondence session and called on Slovenian Sovereign Holding (SSH), the state asset custodian, to provide detailed clarification of the circumstances of the resignation by 4 November.

Earlier today, the opposition New Slovenia (NSi) requested an emergency session of the parliamentary commission on public finances to discuss corporate management at state-owned companies and political staffing.

The party also proposes that the Commission for the Prevention of Corruption investigate possible corruptive means in resignation or appointment of state companies' management and supervisory boards.

Berločnik was named chief executive in February 2011, when Petrol was reeling from a financially disastrous attempt to take over rival Istrabenz, and his second five-year term would have ended in 2021.

He is credited with transforming a traditional fuel retailer into an all-round energy group with a strong electricity division and increasing clout in retail.

Less than a month ago, the Manager Association named him the manager of the year.

Petrol has been going strong. It saw its sales revenue rise by 15% to EUR 2.73 billion in the first six months of the year, with net profit up by 4% to EUR 40.7 million from the same period in 2018.

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