October 11, 2017 / 9:46 AM / a year ago

Croatian parliamentary commission to investigate Agrokor demise

ZAGREB, Oct 11 (Reuters) - Croatian lawmakers approved on Wednesday a parliamentary commission to investigate how and why the country’s largest private company, food group Agrokor, ran into trouble and needed the state to step in to prevent it from collapsing.

The commission, headed by an opposition deputy, has nine members, five from the ruling coalition of conservatives and liberals and four from the opposition led by the social democrats.

The commission is likely to shed light on how the biggest employer in the Balkans region, with around 60,000 staff, plunged into a liquidity and debt crisis that threatened to destabilise the Croatian economy..

Earlier this week, an audit revealed Agrokor made a net loss of 11 billion kuna ($1.8 billion) last year, while the value of its capital for 2015 and 2016 was cut by 22 billion kuna.

Croatian police have launched an inquiry into whether there were any signs of criminal activity behind Agrokor’s financial problems.

Some commentators were sceptical the parliamentary commission would achieve much.

“Although the logic behind the parliamentary commission is to make public relevant facts (about Agrokor), I think this won’t yield too much as the commission’s work is more likely to become a ground for political bickering,” said political analyst Davor Gjenero.

A state-appointed crisis management team is due to stay at Agrokor until mid-July at the latest, during which time creditors are expected to reach a settlement over their claims. An alternative would be a bankruptcy for the food group.

Analysts expect a settlement will lead to the sale of Agrokor’s food production and retail operations, and that creditors will have to take writedowns on some debt.

$1 = 6.3366 kuna Reporting by Igor Ilic; Editing by Mark Potter

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