The Fortenova Group stated on Wednesday that the Slovenian AVK regulator had temporarily seized the shares of Mercator, which is part of this Zagreb-based group, criticising the Slovenian authorities for a disproportionate and unfounded penalty.

“The seizure is based on an unprecedented disproportionate, non-final penalty in the amount of EUR 53.9 million, imposed by AVK on Agrokor d.d. in September 2019 in relation to a concentration case that Agrokor is appealing in the Slovenian court,” Fortenova says on its website.

The group also says that the non-final penalty “is clearly disproportionate since the company in question, Costella, generates globally only slightly more than EUR 1 million in revenue yearly.”

“The seizure of Mercator shares is in itself also largely disproportionate, since the shares in question have an appraised value of in excess of EUR 140 million, and the appealable penalty – that is being contested – is in the amount of EUR 53.9 million,” says the group.

In September AVK imposed this penalty on Agrokor over its failure to report concentration of Agrokor AG and Ardey Global Ltd.

According to AVK’s explanation, with that concentration Agrokor acquired a 100 per cent stake in the company that owns the Slovenian company Costella d.o.o. and was, pursuant to the Slovenian Competition Act, allegedly obliged to report the concentration within 30 days of signing the takeover agreement. As such a report was not filed in a timely manner, AVK instituted proceedings to assess the concentration ex officio.

“Agrokor has publicly and directly explained that it considers this decision of the AVK to be completely unsubstantiated, since all decisions related to the above described acquisition were made and executed solely by Ivica Todoric alone, without the knowledge or participation of any other member of the then Management Board of Agrokor d.d. and thus the acquisition had nothing to do with Agrokor d.d., but with Agrokor AG from Switzerland, which has not been under the control of Agrokor d.d., but was initially run solely by Mr. Todoric,” reds the press release.

The local media in Slovenia reported on Wednesday that the seizure of the shares would make the transfer of Mercator’s shares to Fortenova very complicated.