The main complaint, pointed out by Agrokor d.d. in its appeal against the decision on the confiscation of shares, is that the Agency, taking into account the circumstances of the case at hand, had no legal basis for the issuance of the decision on confiscation.
The decision on the confiscation of shares is unconstitutional, arbitrary and illegal. It is all the more unlawful by reason of numerous provisions of procedural rules being violated at the adoption of the decision by the Agency.
As the decision on the confiscation of shares was made independently by the director of the Agency Mr Andrej Matvoz, it has not been issued by the competent body.
Today Agrokor d.d. has lodged an appeal against the decision on the confiscation of shares, issued by the Slovenian Competition Protection Agency (the Agency) by which the Agency aims to secure the enforcement of the non-final misdemeanour decision according to which the Agency has, due to the alleged misdemeanour, imposed a fine in the amount of EUR 53,900,000 on Agrokor d.d. and against which Agrokor d.d. has already on 8 November 2019 lodged a request for judicial protection before the Agency.
As mentioned, the misdemeanour decision setting a fine in the amount of EUR 53,900,000 is not final, and instead of doing everything in its power to ensure that the misdemeanour court would render its decision with respect to the request for judicial protection dated 8 November 2019 as soon as possible, until 12 December 2019 the Agency has not even referred the mentioned request to the court. It is not clear, why the Agency has been waiting with the referral of the request for judicial protection to the misdemeanour court for more than a month; however, such an action has once again demonstrated a continuing and controversial behaviour of the Agency towards Agrokor d.d., showing that the Agency has been throughout the entire procedure pursuing the purposes contrary to its statutory powers. If the Agency’s true intention was to enforce the misdemeanour decision as soon as possible, the Agency would have referred the request for judicial protection to the misdemeanour court immediately; however, it is evident that the Agency failed to do so, as it is most likely aware of the fact that the arguments put forward by Agrokor d.d. in its 92 pages request for judicial protection, are substantiated.
Finally, the Agency has issued the decision on the confiscation of shares more than two months after the issuance of the misdemeanour decision, where such an act in itself demonstrates that the Agency’s actions in the case at hand are at least unusual. If it was true that the Agency issued the decision on the confiscation in order to secure the enforcement of the misdemeanour decision, the Agency would most likely have issued the decision on the confiscation significantly earlier or at least together with the misdemeanour decision. Failing to do so, it is evident that there are some other intentions, hiding behind the decision of the confiscation of shares, which is in the case at hand even confirmed by the Agency’s public communication.
In the light of the foregoing, Agrokor d.d. has today, on 24 December 2019, lodged an appeal against the decision on the confiscation of shares due to its unconstitutionality, evident arbitrariness and illegality.
The main complaint, pointed out by Agrokor d.d. in its appeal against the decision on the confiscation of shares, is that the Agency, taking into account the circumstances of the case at hand, had no legal basis for the issuance of the decision on confiscation. Namely, Paragraph 5 of Article 201 of the Minor Offences Act provides that a decision on the confiscation of shares may be issued if “there is a suspicion that the perpetrator might hide or leave to an unknown location or go abroad during the misdemeanour procedure or before a decision is enforced”. Therefore, the main condition for the temporary security measure under Paragraph 5 of Article 201 of the Minor Offences Act is the existence of suspicion that the perpetrator might hide or leave to an unknown location or go abroad during the misdemeanour procedure or before a decision is enforced. In the case at hand, the Agency should therefore primarily establish that there is an existence of suspicion that Agrokor d.d. – where it is not irrelevant to point out again that Agrokor d.d. is a legal entity – might hide or leave to an unknown location or go abroad. In the decision on the confiscation of shares, the Agency fails to provide any reasons as to how legal entities might hide or leave to an unknown location or go abroad or why such a suspicion might exist in the case of Agrokor d.d. The Agency most likely fails to provide such reasons because in the case of legal entities this is conceptually impossible. Namely, the conditions for imposing the measure on confiscation of shares clearly refer only to a perpetrator as such – that is to the question of where he/she/it is located, and not to his/her/its assets. Therefore, an interim measure may be issued if there is a suspicion that the perpetrator might hide or leave to an unknown location or go abroad and not if there is suspicion that he/she/it would hide his/her/its assets or transferred it to an unknown location or abroad. The assets listed in Paragraph 5 of Article 201 of the Minor Offences Act constitute only means of security and not the object of it. Instead of giving reasons for how Agrokor d.d. would even be able to hide or leave to an unknown location – this being obviously conceptually impossible for the Agency to do – the Agency rather chose to entirely neglect the conditions for the imposed sanction and focus exclusively on the statutory consequence: temporary confiscation of shares.
It clearly follows from the above that by its decision on the confiscation of shares, the Agency did not pursue the objectives meant to be pursued by the interim measure under Paragraph 5 of Article 201 of the Minor Offence Act, but some completely different objectives which it could not pursue otherwise. It follows from the public announcement of the Agency published on its website that the Agency issued the decision on the confiscation of shares »with the purpose of ensuring observance of the competition rules« despite the fact that for such, even though legitimate, purposes, there are entirely different measures available to the Agency other than the temporary security measure.
All the above-mentioned clearly shows that the decision on the confiscation of shares is unconstitutional, arbitrary and illegal. It is all the more unlawful by reason of numerous provisions of procedural rules being violated at the adoption of the decision by the Agency.
As the decision on the confiscation of shares was made independently by the director of the Agency Mr. Andrej Matvoz, it has not been issued by the competent body. Namely, the decision stating only the name of the director of the Agency is contrary to the practice of the Agency mentioning the decision being adopted at a session of a misdemeanour panel at a certain time. This decision is also contrary to Paragraph 1 of Article 12s of the Prevention of Restriction of Competition Act (ZPOmK-1) which stipulates that in misdemeanour procedures in individual cases for which the Agency is competent and in which the decisions ending the procedure before the Agency are adopted, the decision should be made by a panel of three members.
Furthermore, the decision on the confiscation of shares is not even enforceable. The confiscation shall be performed by the competent tax authority, whereas the only legal ground on the basis of Tax Procedure Act is registration of the prohibition of disposal and there is no legal ground either in Tax Procedure Act or in any other act which would allow the competent tax authority to temporarily confiscate securities as ordered by the decision on the confiscation by the Agency. All of this is also a reason for the illegality of the decision on the tax enforcement by which the Financial Administration of the Republic of Slovenia registered the prohibition of disposal on the Mercator shares. Namely, by this decision Financial Administration of Republic of Slovenia effectively imposed another sanction and not the one which it should have imposed on the basis of the decision on the confiscation of shares. For this reason, Agrokor d.d. intends to file an appeal against the decision of the Financial Administration of Republic of Slovenia in the statutorily defined period.
The reasoning of the Agency for adopting the decision on the confiscation of shares is contradictory in itself. On the one hand, it states erroneously that because of Act on Extraordinary Administration Proceedings in Companies of Systemic Importance to the Republic of Croatia the execution of the misdemeanour decision could be endangered. On the other hand, it states erroneously that Act on Extraordinary Administration is not even recognized in Slovenia. Therefore, whenever fitting, the Agency refers to the Act, however, when not, the Agency ignores it completely. At the same time, the Agency does not give any reasons how the confiscation of shares for the maximum statutorily defined period is justified.
Given all the stated reasons and taking into account the duty of the misdemeanour court to make a decision on the appeal within 48 hours, Agrokor d.d. expects the competent misdemeanour court to annul the decision on the confiscation of shares, close the proceedings on the securing of enforcement, and return the confiscated shares to Agrokor d.d. or delete the prohibition of disposal of the confiscated shares from the register before the end of this year.
