The Hungarian CEO of the Croatian energy company Ina, Sandor Fasimon, tendered his resignation on Wednesday, the company said.

“Despite having no involvement in any of the illegal actions that have surfaced around Ina recently, Sandor Fasimon has tendered his resignation as CEO of Ina,” company’s press release said. Fasimon’s resignation comes a day after Economy Minister, Davor Filipovic, said he would ask the entire management board to resign, in the wake of an illegal gas trade scandal which gained considerable publicity in local media.

Croatia’s national oil company Ina is co-owned by Hungary’s oil firm Mol, which owns a 49-percent stake, and the Croatian government, which controls a 45-percent stake in the company.  Ina’s management and supervisory boards are both split in half with half of executives consisting of Hungarians appointed by Mol and the other half of Croatians appointed by the HDZ-led government.

Ina executive defrauds Ina of €133 million

The suspects in the recent scandal — former Ina executive and low-ranking member of HDZ, Damir Skugor, Skugor’s father Dane, the former head of the national bar association, Josip Surjak, Surjak’s business partner, Goran Husic, and the former CEO of a publicly-owned regional gas distributor PIS in eastern Croatia and also a member of HDZ, Marija Ratkic, allegedly defrauded Ina of more than 1 billion kuna (€133 million).

Investigator allege that Skugor, who was in charge of gas trading, signed contracts supplying Ina’s natural gas to Ratkic’s company PIS at fixed prices which were well below market value. Ratkic would then re-sell the gas at the same price to a private-owned business called OMS Ulaganje owned by Surjak and Husic, who would then go on to sell the gas to buyers abroad, at prices often ten times higher – investigators found that the suspects were buying gas from Ina via Ratkic’s company for €19.5 per mWh only to sell it on the open market for €210 per mWh.

The scheme was only discovered after large sums appeared in the account of Damir Skugor’s father Dane, a pensioner living quietly near Sibenik, which led the bank to notify authorities under rules adopted to combat money laundering. According to investigators, Damir and Dane Skugor pocketed nearly 500 million kuna (€66 million), Husic took more than 90 million kuna (€12 million), and Surjak another 68.9 million kuna (€9 million). In addition, more than 200 million kuna (€27 million) in profit was discovered in the bank account of OMS Ulaganje.

During questioning, Skugor said he was not guilty, and that the gas was sold in line with Ina’s standard business policy.

Fasimon: This is not Ina, this is not us

“I was extremely shocked when I learned about the actions of Damir Skugor and his associates. During the past ten years, Ina has come a long way, coming from the brink of bankruptcy we have reached financial stability, and we are in the process of realizing the largest industrial investment in the history of the country by building a plant for processing heavy residues at the Rijeka refinery,” Fasimon was quoted as saying on Wednesday.

In the wake of these revelations opposition MPs called for PM Plenkovic and his government to step down, while Plenkovic’s Economy Minister, Davor Filipovic, announced a meeting with Ina’s top management on Wednesday, where he said he would ask for resignations, and also insist on a new management model.

“Skugor’s deeds are despicable and do not represent Ina’s identity. This is not Ina, this is not us. I am proud of our joint achievements in the past decade, and despite the fact that I had nothing to do with Skugor’s crime or any other wrongdoing, as a responsible company leader I have to bear a moral obligation for the whole of Ina. Therefore, the right thing I can do now is to offer my resignation”, said Fasimon on Wednesday.

Fasimon was appointed to the post in July 2018. Before that, he had a variety of executive roles at Mol since 1998, including six years as CEO of Mol Hungary, from 2012 to 2018.

The company said that Fasimon would continue as the company’s top executive until his replacement is found, and that in the meantime Ina is conducting an ongoing internal investigation about the whole affair.