May 11, 2018 / 1:12 PM / 10 days ago

Croatia coalition meets as pressure mounts on Deputy PM over Agrokor role

ZAGREB (Reuters) - Leaders of Croatia’s ruling coalition met on Friday to discuss opposition demands that Deputy Prime Minister Martina Dalic resign over conflict of interest allegations linked to the restructuring of the country’s largest private firm.

FILE PHOTO: Croatian Prime Minister Andrej Plenkovic (C) speaks to media next to Finance Minister Zdravko Maric (R) and Economy Minister Martina Dalic in Zagreb, May 4, 2017. REUTERS/Antonio Bronic/File Photo

Dalic, who is also economy minister, led efforts to save food producer and retailer Agrokor [AGROK.UL] after it was put under state-run administration in April 2017, weighed down by debt accrued during an ambitious expansion drive.

On Wednesday, local news portal Index.hr published what it said was one-year-old email correspondence between Dalic and financial and legal experts she consulted while preparing an emergency law to save the firm — the Balkans’ biggest employer — from bankruptcy.

Some of the experts were later engaged as consultants in the restructuring process for hefty fees, prompting the opposition’s conflict-of-interest claim.

Dalic denied the allegation on Friday, saying that the emails had been taken out of context and that she would not resign.

“When preparing the (emergency) law we had little time and many experts were consulted,” she said, portraying the email leak as “an attempt to prevent the settlement over Agrokor debt”.

Prime Minister Andrej Plenkovic, whose conservative HDZ party heads the coalition, said on Thursday he saw no wrongdoing on Dalic’s part. But some of its smaller partners pushed for a meeting to discuss Dalic’s situation, to which the HDZ agreed.

The coalition agreed to meet again next Tuesday.

“We will talk about how the settlement process is going. The key thing now is to save jobs and reach settlement. Political responsibility will remain the topic in the coming days and also once the settlement has been reached,” Ivan Vrdoljak, head of the junior coalition partner HNS, said after the meeting.

Darinko Kosor from the liberal HSLS party said that Plenkovic had the support of his partners but that any allegations of graft must be looked into.

“The parliamentary majority is not in jeopardy. I expect the settlement to be reached on schedule, but also I expect the relevant bodies to investigate if anyone has made an unlawful gain in (Agrokor’s) restructuring process,” he said.

The coalition’s 77 deputies give it only a small majority in the 151-seat parliament.

The opposition, led by the Social Democrats and the centre-right Most “Bridge” party, has previously targeted Dalic over Agrokor, and she survived a no-confidence vote in parliament last month.

Agrokor’s creditors, which include foreign and local banks, agreed on debt settlement terms last month, which they must approve in a vote before July 10 to prevent the firm from going bankrupt.

Reporting by Igor Ilic; Editing by Hugh Lawson

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