Twelve former executive officers of the indebted Pula-based Uljanik shipyard company were arrested on Tuesday by Croatia's anti-corruption police unit (PNUSKOK) and the Rijeka county state attorney.

Later on Tuesday, police said that the arrests came as a result of a criminal investigation which had started in September 2018. The executives arrested are suspected of multiple counts of “abuse of trust in economic transactions” and one count of subsidy fraud, estimated to have cost the state budget and shipyards some 1.2 billion kuna (€167 million).

The indebted Uljanik group owns the dock of the same name in Pula and another mayor shipyard, 3. Maj, in the port city of Rijeka.

The arrested executives are suspected of participating in possible wrongdoings “during the restructuring efforts in the shipyard… namely the business of a group of companies,” Interior Ministry spokesperson, Marina Mandic, confirmed for state news agency Hina.

According to unofficial information, among those arrested are former management board chairman Gianni Rossanda, his predecessor, Anton Brajkovic, and former members of the company’s management board, Marinko Brgic and Veljko Grbac, Hina reported.

Rossanda had taken over as CEO of Uljanik Group from Brajkovic in 2013.

Meanwhile, the workers of the indebted dock are still on strike, which began last Thursday when they welded shut the doors of two out of three entrances to the dock, not allowing anyone but the workers themselves to enter. Not even the subcontractors who are working on a polar cruiser currently under construction there can enter, Jutarnji List daily reported.

They are demanding that the management and the government agree on the restructuring plan for the company, or obtain a loan to pay out their wages.

The Uljanik unionists said on Tuesday that although they knew nothing specific about the arrests, they confirmed that the state attorney office (DORH) has been investigating Uljanik in recent months.

“This is the first time I hear of the arrests, and the only thing I know is that DORH has been investigating Uljanik for the past 10 months,” said Rajko Kutlaca, former member of the Uljanik Supervisory Board.

The depth of Uljanik’s troubles surfaced in January 2018, when the government agreed to issue a €96 million guarantee for a bank loan Uljanik management needed to borrow, which obliged the company to find an investor within six months willing to partner up with the perennially indebted dock.

The company, which specialises in building bulk carriers and oil tankers, was hit by a string of cancelled orders and blocked bank accounts due to unpaid suppliers, as well as a series of strikes of workers who are also shareholders of Uljanik, owning a 47 percent stake at the company.

After all attempts to get another round of financing have failed, the government is expected to decide on the future of the company. According to a government report from last week’s meeting of ruling coalition parties, cited by Jutarnji List daily, liquidating the company would cost the government 4.1 billion kuna (€553 million), whereas a restructuring project would cost 7.6 billion kuna (€1 billion).

Another meeting is expected in the days ahead, with Prime Minister Andrej Plenkovic and government ministers expected to opt for one of the two scenarios. But workers are adamant that bankruptcy should be avoided at all cost.

“If the company goes into receivership, everyone will lose, not just us, but also the shipowners. We should all work to make the restructuring happen,” said on Tuesday Boris Cerovac, chairman of the striking committee at the shipyard.

According to Cerovac, there are currently 2,740 workers in the Uljanik Group and 1,800 have left the Pula and Rijeka shipyards so far.

(€1 = 7.41 kuna)

Follow N1 via mobile apps for Android | iPhone/iPad | Windows| and social media on Twitter | Facebook.