Podravka – The Spice affair
There is no Croat who doesn’t know what the most important product of Podravka is? The answer is Vegeta – a well known spice which was placed on the market back in 1959 and today the product is sold in over 40 countries on all continents. Podravka employs 6700 people.
The latest scandal in the Croatian economy is the Podravka affair, also referred to as the Spice affair. Apparently some of the current and prior managers of Podravka, has tried to buy a large part of the company through a company owned by them, the tricking is that that capital in this company all comes from the company?
So it seams that several people from the board has decided to copy the privatization foundation like it worked in the 90’s. Somehow they just forgot that we are in 2009, and that Europe might be looking.
About 2 months ago, somebody found out that Podravka borrowed 65 mio. kunas to SMS a Split based company. This information became public as the SMS Company defaulted on paying back the loan. The Director of the company SMS, claimed that the money was spend for investment in production, and that the current global crises had lead to a decrease in revenue, and therefore SMS temporally had problems in paying back the loan.
The Financial police started and investigation in Podravka, as they found it quit strange that a government owned company would lent money to a private owned company after a month they had discovered that a total of 250 mio kunas was missing in Podravka.
The 65 mio. loan which was given to SMS for investment in production was only on the companies account for one day, SMS had apparently forwarded that money to a company on Malta Fima Ltd. Fima Ltd was a cover up company with the sole purpose of buying shares in Podravka.
Tree days ago the police arrested Darko Marinac, former CEO and current member of supervisor board of Podravka, Zdravko Sestak, the current head of the Board and the board members: Josip Pavlovic and Saša Romac, and of course the director of the Split based company SMS Srdjan Mladini?.
The Affair now has grown into a major political scandal, the Parliament opposition accuses Economy Minister Polancec for direct involvement (Before he became the minister of economy he was in a top position at Podravka). Journalists today announced that the Supervisory Board and others are willing to talk about the Minister’s involvement in this affair.
Currently Croatia takes 62 place from the top of the anti corruption index, these guys dont seam to be interested in helping Croatia to a better position in the Index.
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