Scandal: is the Croatian agricultural company snatched away from the domestic real estate guru by evading Russian sanctions?

Scandal: is the Croatian agricultural company snatched away from the domestic real estate guru by evading Russian sanctions?
Scandal: is the Croatian agricultural company snatched away from the domestic real estate guru by evading Russian sanctions?

Back in February, i.e. before the outbreak of the war, the Indotek Group agreed with Sberbank, which later collapsed due to the sanctions imposed on Russia, to buy from it a 43 percent stake in the Fortenova Group, the leader of the Croatian agricultural market. Now, however, it seems that he has been overtaken by an investor who has emerged from the unknown. Until now, the only thing that was certain was that the deal worth half a billion euros (HUF 200 billion!) was concluded with Dubai’s Sheikh Saif Alketbi. But according to Croatian newspaper reports, the Dutch subsidiary of Sberbank (formally owned by Fortenova), the company called SBK ART, was not bought by the Sheikh of Dubai, but ultimately by Croatian businessmen with the intervention of Russians, displacing not only the Hungarian Indoteks, but also the Croatian pension funds. which were also potential buyers.

The scandal surrounding the sale broke out at the end of last week. Croatian newspapers, citing reliable sources, claim that the sheikh – who doesn’t even know where Croatia is!? – appeared in spades, and Croatian businessmen and Russian companies are behind it.

The reports of the local press seem to be confirmed by some government sources. According to these the supervisory organization under the Ministry of Foreign Affairs of the Croatian government may soon torpedo the sale after a long investigation. Not least because the sale of the large agricultural complex requires the consent of both the Croatian and EU authorities. However, this has not happened so far. And without these permits the megatransaction is invalid, and may even be punished for circumventing or violating the sanctions applicable to Russian companies. The range of this is quite wide, it can range from a tax office investigation to the freezing of assets.

He is the protagonist of a messy case. Photo: Fortenova Group

What could be behind the megastore?

The daily newspaper Jutarnji list mentions the names of two Croatian businessmen among those who are likely to have their assets frozen, saying that they both actively participated in the deal and are now in Dubai, but according to the newspaper, some officials of Fortenova may also be on the list. One of the suspected Croatian businessmen is Krezimir Filipovic and the other is Miodrag Borojević. The two of them can be behind Alketbi. (The latter’s lawyer rejected the accusations, saying that it was a transaction outside Croatia, that a Dutch company concluded the deal, with which Croatia had nothing to do.)

Citing sources close to the investigation, the paper reported that the entire process of selling Fortenova shares was managed by Sberbank CEO Herman Gref and his deputy. (Gref is a former Russian economy minister who is referred to as President Vladimir Putin’s right-hand man in economic matters.)

The deal struck by the Dubai-Moscow axis is considered extremely unusual, especially since the sheikh, named as the buyer, decided on it in just a few days without Fortenova’s due diligence.

According to another source, Filipovic – more precisely, his Russian company – is behind the half-billion-euro deal. The company named Velestroj participated in significant investments in Russia, primarily in gas pipeline construction. The Russian customers have accumulated a significant debt towards him – according to estimates, it reaches half a billion euros. And this is where the threads come together. The Croatian-Russian-Dubai triangle is devalued into a simpler relationship involving the Croatian businessman and Sberbank, which wants to sell the stake. This is confirmed by the also Croatian information that the purchase price of the Fortenova share package was not transferred to Sberbank from Dubai, but presumably from Russia. And the final beneficiary may not be Sheikh Alketbi, but the two Croatian businessmen.

How much is the Fortenova worth?

But why this “struggle” for the company group? Although Fortenova’s financial situation is by no means rosy, it is still the most important agricultural group in the Western Balkans – with a significant retail and wholesale store network. The number of employees exceeds 45,000, and the number of suppliers is around 30,000. The group of companies is active in five countries and is even a leading trade chain in some places, despite the fact that Western European multinationals already have strong positions here. Fortenova, which was established in 2019 on the ruins of the former company Agrokor, has undergone significant modernization in the recent period, one of the signs of this is that in the first eight months of this year, the sales revenue increased to 3.5 billion euros – although the profit according to the balance sheet is 200 million euros. (According to Fabris Perusko, the CEO of the company group, this year’s turnover could already be over five billion euros.) Fortenova’s debt stock is still significant today. Three years ago, at the time of the bankruptcy of the predecessor company, Agrokor, this was close to 8 billion euros. According to the CEO, Fortenova’s debt stock has decreased significantly because most of it has been converted into equity.

The messy buying and selling process certainly does not help the operation of the company group, not to mention that the secure ownership background also significantly affects the daily operations.

It seems that the Indotek Group has not yet definitively given up on the acquisition of Fortenova’s ownership share, it is waiting for developments – until the scandal surrounding the purchase of the largest company in the Western Balkans subsides. When asked by Mfor, the most powerful domestic real estate entrepreneur – he is sixth in the list of the 100 Richest Hungarians 2022 with a fortune of 240 billion forints – Dániel Jellinek did not want to comment on the rumors surrounding the company group, but at the same time indicated that they still maintain their interest in the company, but only in compliance with the sanctions on Russia . He emphasized that they intend to invest capital in the deal only if they have all the relevant permits and in the case of the supportive partnership of the Croatian economic and political stakeholders.

The messy case is also particularly unpleasant for the Croatian Prime Minister. Because Plenkovic cannot ignore the facts and data that have come to light in recent weeks just because of the country’s EU membership, not to mention the fact that Fortenova controls a quarter (!) of the agricultural sector there, and thus its future is by no means insignificant for the country.


The article is in Hungarian

Tags: Scandal Croatian agricultural company snatched domestic real estate guru evading Russian sanctions

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