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Croatian court upholds law on debt-ridden company

Xinhua,May 08, 2018 Adjust font size:

ZAGREB, May 8 (Xinhua) -- The Constitutional Court of Croatia announced on Tuesday that "lex Agrokor", a law on the basis of which the Croatian government tackled the financial crisis in the largest Croatian private company Agrokor, is in accordance with the Constitution.

Among 13 judges of the Constitutional Court, three gave a different opinion, because they felt that there was no need to adopt a special law on Agrokor.

The Croatian Parliament adopted the Law on Extraordinary Administration Procedure in Companies of Systemic Importance for Croatia, known as "lex Agrokor" on April 6 last year, after it was found that Agrokor owned by Ivica Todoric was facing bankruptcy.

With revenues of 6.5 billion euros (7.66 billion U.S. dollars) in 2015, which was almost 16 percent of the country's total GDP, Agrokor, a private food and retail group, is the biggest company in Croatia.

According to The Constitutional Court, the purpose of the law is to reach a settlement among creditors so that Agrokor could continue working and that the law-making process was not in contravention of the provisions of the Croatian Constitution.

The dispute settlement procedure is under way and should be completed by July 10. Russian banks Sberbank and VTB should take between 30 and 46 percent of Agrokor, the American capital Knighthead Capital 10 percent, Croatian banks also 10 percent, and suppliers eight percent.

Former Agrokor owner Ivica Todoric left Croatia in October 2017 for London after an investigation was launched against him. Croatian authorities suspect Todoric of corruption, forgery of administrative documents and fraud.

Judge Emma Arbuthnot at the Westminster Magistrates Court in London issued a decision on April 23 that there was no obstacle to extraditing Ivica Todoric to Croatia, after which Todoric complained and the proceedings were pending. Enditem

 

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