Agrokor reports Slovenian competition agency to EU authorities

NEWS 27.12.2019 17:26
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Source: N1

The Agrokor company has reported the Slovenian Competition Protection Agency to the European Commission and EU competition authorities over the agency's recent moves in connection with the transfer of Mercator's assets from Agrokor to Fortenova.

Agrokor’s emergency administrator Fabris Perusko on Friday sent a letter to European Commission Vice-President and Competition Commissioner Margrethe Vestager, Director-General for Competition Cecilio Madero Villarejo and the heads of the competition authorities of the EU member states and members of the European Competition Network, informing them of recent moves by the Slovenian Competition Protection Agency in connection with the transfer of Mercator’s assets from Agrokor to Fortenova Group and saying that they were contrary to the laws and practices of the EU and Slovenia.

Perusko drew attention to violations of investors’ legitimate expectations with regard to the application of law and practice to investment within the EU, discrimination on grounds of nationality and illegal expropriation of investment within the EU committed by the Slovenian competition agency. He said that these matters were currently before Slovenian courts and that action was likely to be taken before international courts.

The Croatian retail chain Agrokor currently holds a 69.6 percent stake in Slovenia’s Mercator. Perusko recalled that in April 2017 Agrokor was placed under emergency administration and planned to transfer its stake in Mercator to the restructured Croatian legal entity Fortenova Group.

“It seems that the Slovenian administration wishes to prevent this transfer for national political reasons and instead orchestrate that the 69.6 percent stake is transferred to a third party. To this end, on 24 September 2019 the Agency imposed a €53.9 million fine on Agrokor because in 2016, when the company was managed and owned by Ivica Todoric, it did not report concentration for evaluation. The Agency used the fine as an excuse to freeze the 69.6 percent stake to prevent its transfer to Fortenova Group. These actions are contrary to local Slovenian law and practice, as well as to EU law and practice, and constitute a breach of international law,” Perusko wrote.

He warned that as a result of such actions by the Slovenian administration the ongoing restructuring of Agrokor, including the transfer of Agrokor’s stake in Mercator to Fortenova Group, was likely to be delayed or derailed.

This can have considerable implications for the creditors and, in a wider sense, for the EU competition and insolvency regimes, Perusko concluded.