The process of reaching a settlement under the extraordinary administration procedure of Agrokor is one of the most complex in Croatia and in Europe due to the complexities of Agrokor as a business and the total amount of the debt as well as the large number of creditors, 5.700 of them. This section contains all the news on the process of reaching of a settlement for all the key stakeholders, as well as the latest details and developments.
Agrokor surprised by the conduct of Slovenia’s Public Competition Agency (Javna agencija za varstvo konkurence)
20. Jan 2020.
Agrokor expects public authorities to provide complete information to the public, including facts and arguments presented by Agrokor in pending legal proceedings
With regards to yesterday’s release published by the Public Competition Agency of the Republic of Slovenia under the title „Additional explanations related to the concentration of Agrokor AG and Ardeya Global Ltd.“, Agrokor d.d. published a detailed statement on its website, setting out as follows:
Agrokor is surprised by the Agency’s conduct, as it would only be reasonable to expect from competent authorities to refrain from public communication in matters that are still pending and subject to legal proceedings before other authorities and courts. At the same time, Agrokor expects public authorities to provide complete information to the public, including facts and arguments presented by Agrokor in pending legal proceedings.
Agrokor holds that with its public announcement of 16th January 2020 the Agency has breached Art. 11 of the Administration Procedure Regulation and publicly disclosed data that, pursuant to Art. 6, items 6 and 7 of the first paragraph of the Act on Accessing Public Information, it should not have disclosed, as this could be harmful to the completion of pending proceedings.
In relation thereto, Agrokor explains that the Agency arbitrarily selected Agrokor d.d. as the target of its proceedings, although it is only one of the companies in a whole chain of companies of the former Agrokor Group. At the time the concentration was realised, the chain of companies was as follows: Costella d.o.o. is to 100 per cent owned by Ardeya Global Ltd., itself owned to 100 per cent by Agrokor AG. Agrokor AG is owned to 100 per cent by Agrokor d.d., which is owned to 100 per cent by Adria Group Holding BV. Adria Group Holding BV is held to 100 per cent by Adria Group BV, itself owned to 100 per cent by Agrokor projekti d.o.o., which company is owned to 100 per cent by Ivica Todorić.
The above indicates that for the purpose of this procedure the Agency selected a company that has not carried out the acquisition of shares at Ardeya Global (this acquisition was made by the company Agrokor AG), nor is this company the ultimate entity in the chain of companies of the former Agrokor Group. Consequently, Agrokor reasonably believes that the Agency has targeted the procedure towards Agrokor d.d. because Agrokor d.d. is the holder of shares of Mercator d.d. (given that according to all other legally relevant assumptions the Agency should have targeted the proceedings towards any other company from the former Agrokor Group).
Hence the Agency’s conclusion that the acquisition of shares in Ardeya Global constituted an obligation for Agrokor d.d. to report concentration is inaccurate. Pursuant to Art. 43, paragraph 5 of the Act on Preventing the Limitation of Competition (ZPOmK-1), „concentration has to be filed by the person or company acquiring control over the whole or parts of one or more companies“. By the transaction in question, control over Ardeya Global was taken by the Swiss company Agrokor AG (at the point it acquired a share in the target company), and not by Agrokor d.d. (which did not know of the transaction nor was it aware of the transaction for more than one year as of the transaction date). All these arguments related to the non-existence of the obligation to report concentration were presented by Agrokor d.d. on pages 39 to 48 of its request for court protection dated 8th November 2019, consisting of 92 pages, which the Agency has competely neglected in its public announcement. In response to all letters and requests for explanations by the Agency, Agrokor urged the Agency to contact Agrokor AG for explanation. Instead of referring to Agrokor AG (which in the opinion of Agrokor d.d. the Agency has not done to date, either), the Agency continued to send requests for information to Agrokor, which Agrokor d.d. objectively could not have met for the simple reason that it did not have such information. Nevertheless, on 9th October 2019 and 12th November 2019 Agrokor provided the Agency with the explanations it could provide and for the remaining information it again asked the Agency to contact Agrokor AG. The Agency fined Agrokor with EUR 40,000 due to failure to provide information in spite of the fact that Agrokor responded to the Agency’s letters and requests every time; in its letters dated 11th September 2019 and 2nd October 2019 the Agency even changed the content of its requests from Agrokor, as it had obviously realised that Agrokor was not able to meet the earlier requests; Agrokor exerted all efforts to provide the Agency with all requested information related to Agrokor AG it was able to provide. In that regard the legal advisors of the two companies have had intensive discussions since July 2019, where Agrokor AG, despite the complaint lodged by Agrokor d.d. to the Agency, did not want to intervene; on 9th November 2019 Agrokor AG submitted a concentration notification to the Agency. As by imposing a fine in the amount of EUR 40,000 the Agency breached a number of administrative and other respective provisions, as it wrongfully applied substantive law, as it acted completely arbitrarily in determining the amount of the fine and as it wrongfully established the underlying facts, on 29th November 2019 Agrokor filed suit in an administrative procedure with the Adminstrative Court of the Republic of Slovenia, which is still pending. Agrokor believes that the Agency’s claim stated in the explanation, that breaches of ZPOmK-1 provisions related to the obligation to report concentration to the Agency were independent of the effects of the concentration on the relevant market, is inaccurate. Pursuant to Art. 26 of the Misdemeanor Act (ZP-1), in selecting a sanction and imposing a monetary fine the Agency has to take into account the gravity of the alleged misdemeanor and the perpetrator’s guilt. Pursuant to the second paragraph of the quoted Article, the Agency has to take into consideration all the circumstances influencing the decision on whether the sanction should be lower or higher (mitigating and aggravating circumstances), including the degree of threat or violation of protected good and the circumstances that were in place at the point when the misdemeanor was committed. If the reported concentration is not prohibited or if it has no impact on the relevant market, the gravity of the committed act of not having reported concentration is certainly significantly lower than if the concentration that had not been reported was prohibited or could actually affect the relevant market. In addition, in case of not reporting concentrations which have no impact on the relevant markets, the level of threat to protected good is also lower. And last but not least, all circumstances (including the effects of non-reported concentration on the relevant market) must be taken into account in assessing whether the reasons of giving the notice or warning in question are related to the alleged misdemeanor. Relying on numerous legal and factual arguments, Agrokor has contested all these wrongful findings of the Agency in its request for court protection dated 8th November 2019, which is still pending. In its public announcement the Agency has confirmed Agrokor’s claims that it had used the interim protection measure beyond the scope of the wording of Art. 201, paragraph 5 of the Misdemeanor Act. In its announcement the Agency speaks about the „fear and great danger that the imposed fine will not be executed“, while the legal wording pertains to the concern that the perpetrator would flee or be unavailable. In no way whatsoever has the Agency proved that Agrokor might avoid paying the monetary fine (while Agrokor itself believes that it would succeed in its request for court protection and that the decision made in the misdemeanor process would be nullified and the misdemeanor process discontinued). In imposing the interim security measure the Agency simply made up the conditions that it has applied in this case. Given that such course of action of the Agency and state authorities is dangerous and the wrongful and inaccurate application of statutory provisions so obvious, Agrokor will use all available national and international legal means against the decision on the interim security and against the decision of the District Court of Ljubljana. Such attitude of the Agency clearly shows that it has been pursuing goals targeted against Agrokor, contrary to those it should stick to in conducting procedures. In choosing Agrokor as a target to build its own practice upon, to the damage of Agrokor, it has crossed the line of legality and constitutionality. The integral version of Agrokor’s response to the Agency’s public announcement can be found here .