Croatia can prosecute MOL executive for corrupt takeover of INA?

The Management Board chair and chief executive officer of Hungary's MOL oil company, Zsolt Hernady, was not acquitted by a Hungarian court of the charges of a corrupt takeover of Croatia's INA oil company, which leaves open the possibility for Croatian authorities to prosecute him on the charges that he gave former Croatian prime minister Ivo Sanader EUR 10 million in bribes to acquire majority management rights in INA, the Jutarnji List daily reported on Monday.

The daily carried information published by an independent Hungarian investigative news portal according to which a Budapest-based appeals court has decided to drop the case against Hernadi for bribe giving.

Contrary to interpretations by Hernadi's legal team, according to which a final ruling has been passed in that case based on which Hernadi can avoid prosecution by Croatian judicial authorities, this leaves open the possibility for the Croatian judiciary to re-issue a European warrant for his arrest so that he can be put on trial without any procedural restrictions.

In 2013 Hernadi was charged with giving Sanader EUR 10 million in bribes in exchange for obtaining management rights in INA. He remains beyond the reach of the Croatian judiciary because the Hungarian judiciary, citing protection of national interests, has turned down requests by the Croatian prosecutorial authorities to enable his questioning.

Even though the Croatian judicial authorities never referred the case to Hungary, the Hungarian chief prosecutor established, based on his own investigation, that Hernadi had not committed the crime he is charged with.

In the meantime Hernadi was sued by former MOL employee and stockholder Ilona Banheygi, who claimed that she lost a profit of EUR 78,000 due to a plunge of MOL stock prices following reports about MOL's corrupt takeover of majority management rights in INA. She accused Hernadi of fraud and of giving bribes in international transactions.

The media claimed at the time that this was a manoeuver whereby Hernadi wanted to avoid a trial in Croatia, considering that Banheygi is the common law wife of a MOL Management Board member who was one of the main negotiators in talks with Sanader, along with Hernadi, and who was a witness for the defence in Sanader's trial in Croatia.

Jutarnji List says that this is evidenced by a secretly recorded conversation of the Polish PNK oil company's management board chair, which was published by the Polish media, in which he claims that Hernadi told him that the said lawsuit was rigged so as to prevent his possible trial in Croatia and that he would soon be acquitted of the charges.

A Budapest court in 2014 decided to acquit Hernadi of fraud and embezzlement charges, and the trial for international bribery was suspended. In late 2014, an appeals court made a ruling which Hernadi's defence interpreted as a final acquittal, saying that it had to be accepted as such also by the Croatian judiciary.

The Croatian anti-corruption office USKOK said in December 2014 that that ruling could not result in the application of the institute of double jeopardy to corruption proceedings conducted against Hernadi at a Zagreb court, but that this was rather an attempt by the Hungarian judiciary to prevent his prosecution in Croatia.

USKOK also recalled that it had never referred the case against Hernadi to the Hungarian judiciary.

The independent Hungarian news portal reported that Hernadi's defence then secretly initiated a review of the appeals court's ruling with a submission that proposed "a legal remedy for the protection of lawfulness" but that the state prosecutor thwarted that attempt, saying that the legal remedy had not been applied in that case.

Jutarnji List says that this decision removes any doubt as to whether the Croatian judiciary is authorised to prosecute Hernadi, and quotes statements by Croatian legal experts saying that the published documents made the situation completely clear, since the trial in Hungary did not result in a final ruling.

In July 2015 the Croatian Constitutional Court quashed the trial court verdict against Sanader that sentenced him to eight and a half years in prison for taking bribes from MOL and for war profiteering in the Hypo Bank case, returning the case to the Zagreb County Court for a retrial.

The court cited as the main reasons for its decision the failure by the lower courts to elaborate well enough on Sanader's capacity as "a public official" and the allegation that the agreements signed between the Croatian government and MOL were contrary to Croatia's interests.

Last update: Mon, 01/02/2016 - 13:02

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