Croatia's central bank had probed the dealings of no less than 17 Croatian banks for unlawful financing schemes related the nearly collapsed food and retail group Agrokor, governor Boris Vujcic confirmed on Friday, and added that the state attorney is investigating the case.
“As you know, we detected some irregularities in the way banks did business – since the central bank is tasked with regulating banks, rather than companies like Agrokor, or factoring companies themselves. We detected some irregularities and even unlawful activities in what banks were doing, and we investigated 17 banks. We handed over our reports to the state attorney office, and now they are dealing with that case. If they have something new to report, they will let you know,” Vujcic told reporters on Friday.
Agrokor, which was at the time the largest single private-owned company in the country, fell into a debt crisis in April 2017.
According to media reports, Agrokor – which operated the largest retail chain Konzum – had engaged in a mass financing scheme which saw it issue bonds instead of payments for undeliverted goods to suppliers. They would then convert them to cash from local banks, and give 80 percent of the funds back to Agrokor, which was at the time desperate for cash.
In effect, the scheme amounted to illegal loaning designed to help the company keep afloat, and it seems to have involved almost all banks registered in Croatia, as there are a total of 21 banks registered for business with the central bank in Croatia.
The debt bonds would then be sold to factoring companies. It is suspected that the Agrokor scheme helped balloon the entire factoring sector in the country, which at its height had a 20 billion kuna (€2.7 billion) turnover in early 2017.
The company itself was later taken over by state administration which reached a debt-for equity deal with hundreds of its creditors, with Russia’s Sberbank, which had a €1.1 billion claim, converting its claim to a 39 percent stake, expected to take effect in April.
The new restructured conglomerate will be renamed Fortenova.
(€1 = 7.41 kuna)
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