Competition Watchdog Seizes Mercator Shares from Agrokor to Ensure Payment of Fine

By , 19 Dec 2019, 09:10 AM Business
Competition Watchdog Seizes Mercator Shares from Agrokor to Ensure Payment of Fine

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STA, 18 December 2019 - The Competition Protection Agency (AVK) has temporarily seized 70% of Mercator shares from its owner, Croatian group Agrokor. The move is to ensure that Agrokor pay a EUR 53.9 million fine the agency imposed in September after Agrokor failed to notify it of its 2016 takeover of Slovenian bottled water company Costella.

The agency decided to seize the shares on Monday, according to Wednesday's press release from Fortenova group, the successor of Agrokor which is in the process of taking over Agrokor's viable businesses, as Agrokor is buried under a massive loan debt.

Fortenova says that the anti-trust agency does not have the power to seize the shares, arguing such a move should have been made by a court.

The agency meanwhile responded by saying that the decision is not yet final and that it can be challenged with an appeal.

It cited on its website the regulation on which it based the decision, but could not comment any further, as the procedure is ongoing.

Economy Minister Zdravko Počivalšek said he believed that the agency was acting in line with rules and legislation, while again rejecting speculations that the Slovenian state was interfering in the transfer of Mercator to Fortenova.

The minister, who is on a working visit to Germany, also wrote in the response that he could not comment on the case, as neither the ministry nor him as the minister were acquainted with the agency's acts in individual cases.

"But I believe that the agency, when it comes to the failure to report concentration and the imposed fine, acts in accordance with the adopted rules and legislation," he added.

Počivalšek said that the public part of the agency's decision showed that Agrokor had been called on to report concentration related to the takeover of Costella, but had failed to do so.

Regarding speculations in the public about the state allegedly interfering in the transfer of Mercator from Agrokor to Fortenova, he said that "the rule of law applies in Slovenia, and institutions, including the agency, act independently".

Počivalšek said that the case should not be connected with relations between Slovenia and Croatia. "We are connected with many good joint projects and opportunities we must seize. We need to work on this."

Fortenova said earlier in the day that it plans to protect its assets with all means available, including by informing all embassies of EU countries in Slovenia as well as the US and Russian embassies of the agency's move.

Agrokor took over Costella's parent company three years ago. Since it failed to report market concentration, the watchdog imposed the fine on it three months ago. It now took a step further, seizing 69,57% of Mercator shares, worth EUR 140 million, from Agrokor.

Fortenova meanwhile argues that the decision on the fine is not final because Agrokor has lodged a request for legal protection. However, the agency has not forwarded the request to court, Fortenova says, launching instead the shares seizure procedure.

When the fine was imposed, Agrokor said that Costella was purchased by Agrokor's former owner Ivica Todorović without the knowledge of other executives in the group.

Fortenova finds it problematic that Agrokor's shares were seized based on regulations applying to offences, such as traffic offences, where the perpetrator is caught while committing an offence.

Fortenova claims that the watchdog intentionally abused the law to seize the shares.

Moreover, Fortenova CEO Fabris Peruško held a press conference in Zagreb today, with the Croatian press agency HINA citing him as saying the watchdog's move was designed to hinder transferring Mercator from Agrokor on to Fortenova.

All our stories on Mercator are here

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