October 26, 2016: MOL Group comment on supplying Croatia from Hungarian refineries
October 11, 2016: MOL Group statement on the transport of crude oil to Rijeka
July 15, 2016: MOL Group comment on INA’s refining business
May 12, 2016: MOL Group statement on negotiations
May 12, 2016: MOL Group statement on consultancy services in Croatia
June 12, 2015: INA General Shareholders′ Assembly held - INA Press Announcement
March 12, 2015: INA Announcement on Regulated Gas Price Decrease
January 21, 2015: MOL Group Statement
November 25, 2014: MOL Group Statement
August 26, 2014: Statement by MOL Group
July 30, 2014: Statement by MOL Group
July 25, 2014: Statement by MOL Group
June 23, 2014: MOL Group Statement
April 8, 2014: MOL Group Statement
April 8, 2014: MOL Group Statement
November 27, 2013: MOL Commenced Arbitration against the Government of Croatia
November 8, 2013: MOL’s position regarding its investment in INA
September 27, 2013: Statement from MOL Group General Counsel on rumoured detention order
"The Arbitral Tribunal FINDS, DECLARES, RULES, ORDERS and AWARDS that:
Croatia’s claims based on bribery, corporate governance and MOL’s alleged breaches of the 2003 Shareholders Agreement are all dismissed."
MOL welcomes and continues studying the arbitration award which is almost 200 pages long. With regard to the recent statement of PM Plenkovic on Croatia's intention to buy back the whole of MOL's stake in INA we await Croatia's official notice about this. MOL has always been, and remains open for any discussion about the future of INA.
“MOL has no such plans to supply Croatia from its refineries in Hungary and Slovakia. Even Tifon (100% subsidiary of MOL) is supplied from INA and not from Hungary or Slovakia.”
“The cancellation of the Red Notice is permanent.
This decision confirms what we’ve been saying all along. We have repeatedly rejected any suggestion of improper business conduct and we continue to view this case as politically motivated. We welcome the decision of Interpol, which was adopted following a comprehensive review of the case.”
“MOL, as the largest shareholder of INA, fully supports INA’s management in its efforts to ensuring the flexibility of domestic crude processing and optimizing its assets, whilst also strengthening the security of supply in Croatia. The operational decision to transport 600 tons (about 1% of the total monthly domestic production) crude oil to Rijeka refinery, which has a capacity of 4 million tons exceeding the size of the Croatian market, is a step in that direction. MOL, as a responsible shareholder, will continue to support INA’s management in its efforts to improve its operations, optimize its assets and minimize its losses in line with the best interests of INA. The strengthening of INA’s competitiveness and profitability is in the interest of INA’s shareholders including of MOL.”
“We fully agree that the two main shareholders need to directly discuss about the future of INA’s refining business since there needs to be a mutual understanding to progress and make strategic decisions, whether it is the future of Sisak or the development of Rijeka. An agreement on these issues would serve the best interest in INA, because without solving these structural questions INA’s refining business will continue to suffer and be unprofitable even in a supportive external environment. MOL, as a strategic partner of the Government of Croatia, has always been committed to discuss the business strategy and future development of INA, but unfortunately it did not get the opportunity to do so since July 2014.”
“MOL is and was always ready to carry meaningful negotiations with the Government of Croatia and as such welcomes the statements of PM Oreskovic made this afternoon. MOL has always viewed the arbitration process as a measure to protect its own shareholder value, but the first priority has always been to reach an agreement with the Government of Croatia through negotiations. Since negotiations with the Croatian Government were stopped without results in July 2014 there was no opportunity to conclude an agreement between the strategic partners of INA. ”
“MOL has been present in Croatia since 2003 and has been working with several Croatian consultancy companies since then, but Ana Saric and her company were never amongst these, neither directly or indirectly.”
“We, Squire Patton Boggs LLP, counsel for the Republic of Croatia, and Dechert LLP, counsel for MOL Hungarian Oil and Gas PLC, have been ordered by the UNCITRAL Tribunal seized of Croatia's claim against MOL to issue this joint statement concerning the appearance of former Prime Minister Ivo Sanader and Mr. Josip Petrović to testify before the Arbitral Tribunal on 15-17 April 2016 in London. We have been directed to do so in order to rectify certain false and inaccurate statements that have appeared in the Croatian press.
Specifically, recent press reports that Dr. Sanader and Mr. Petrović testified as witnesses "for MOL" are false and inaccurate. Dr. Sanader and Mr. Petrović were invited by the President of the UNCITRAL Arbitral Tribunal to testify as independent witnesses. Dr. Sanader and Mr. Petrović therefore appeared as witnesses for the UNCITRAL Arbitral Tribunal and not as witnesses for either MOL or the Republic of Croatia.
The expenses associated with the witnesses' travel to London are shared equally by the parties.
The Arbitral Tribunal has directed the parties to reiterate that the testimony of witnesses and all other materials that have been presented in the arbitration are strictly confidential, both parties having undertaken to abide by strict rules of confidentiality and nondisclosure. The tribunal emphasises that it is not appropriate for issues still under discussion and review in the arbitration to be ventilated in the press.”
|Signed, Stephen P. Anway||Arif H. Ali|
|Squire Patton Boggs LLP||Dechert LLP|
|Counsel for the Republic of Croatia||Counsel for MOL Hungarian Oil and Gas|
Decisions on 2014 profit allocation and transfer of other equity reserves to retained earnings were reached with the needed majority, as well as the discharge to the members of the Management Board and the Supervisory Board for business year 2014. Furthermore, voted were the amendments to the list of the Company’s business activities, amendments to the Articles of Association, while the completed Company’s Articles of Association was approved and the decision was made on the selection of the auditor for 2015. Also, a decision was made on the payment of the retained profit in the amount of 15 kunas per share. Shareholders were also presented with the 2014 financial report together with the Independent Auditor's Report, Company and INA Group Status Report for 2014.
On this occasion, the INA MB President, Mr Zoltán Áldott stated “In the last several years we have turned INA into financially stable company, the leading investor and exporter in. We have created value for our shareholders as evidenced by today’s decision on dividend payment in the amount of 150 million kuna. In 2014 INA realized robust investments worth HRK 1.7 bn, reinvesting two thirds of its EBITDA. In 2015 as well, despite the challenging external environment, we plan to maintain our investment levels and the role of the leading investor in the country.”
“With a negotiations process and two arbitration procedures ongoing between the shareholders, MOL is convinced that the reelection of the members of the Management Board for a one year term is in the best interest of INA providing the necessary flexibility to the Supervisory Board for the period following a new agreement or a closed arbitration. MOL is hopeful that the negotiations with the Government of Croatia will come to a positive outcome with the help of the facilitator recommended by the US State Department. This decision does not preclude the reelection of the Management Board members for an additional term in 2016.”
“Further to decision adopted today by the Government regarding the gas price that oblige INA to sell its gas at a new regulated price to HEP as of 1 April, we would like to emphasize that such Government’s decision will have unfavourable effect on the company’s revenue in the amount of HRK 47 million for the period from April to December 2015. Namely, following the last year’s decrease from 2.20 HRK/m3 to 1.71 HRK/m3, the price was further reduced today to 1.59 HRK/m3. We would like to reiterate that last year INA expressed its discontent and accordingly undertook legal steps in regard with the Government’s decision from February 2014 that obliged INA to sell the portion of its natural gas production for household supplies to HEP as the wholesale market supplier at a regulated price that had negative material impact on the company in the amount of HRK 260 million in 2014.”
MOL welcomed last summer the offer of the representatives of the US State Department to facilitate the current phase of negotiations. Therefore MOL has learned with surprise and regret that the Croatian Negotiation Team rejected all four mediators recommended by the State Department and delayed the negotiation process once again. Today it is clearer than ever which side is undermining the negotiations by placing personal and political considerations above INA’s best commercial interest. This impression was further reinforced by the Minister of Economy’s politicized letters addressed to INA’s Management Board. MOL Group has not participated in such political activism and it will continue to refrain from doing so in the future.
Today MOL Plc. has requested the Management Board of INA to convene an extraordinary general meeting of the shareholders of INA with the agenda of extraordinary payout of dividends. MOL will propose to the general meeting to vote in favour of total dividend payout in an amount of HRK 2,000,000,000 kunas (EUR 260 million) from retained earnings.
MOL saved INA from bankruptcy, stabilized it financially and turned it into a profitable company with a significant investment potential. After the Ministry of Economy’s last decision to revoke the licences for exploration in Sava and North-Western Croatia the shareholders understood that the Ministry is currently not supporting an investment friendly environment in Croatia and therefore the time has come now for all shareholders to realize return of their previous investments.
“MOL highly appreciates the efforts made by the President of the Republic of Croatia to initiate discussions with stakeholders about the future of the Sisak refinery.
I would like to comment on some of the conclusions drawn by the Croatian press regarding strategy, timeframes for decisions and responsibilities.
The future of the Sisak refinery has been discussed for more than 15 years. The ceasing of the traditional crude refining activity at Sisak was first proposed in 1998 by the management of INA, chaired by Mr. Davor Stern.
The Sisak refinery has been a constant loss-maker since 2008. MOL’s past experience shows that it can successfully transform a loss-making refinery business into a sustainable operation. Such a transformation can positively contribute to the re-development of an uncompetitive area into a more modern and sustainable one, once a general framework is set. It is precisely such a transformation and the related knowledge transfer that is the role of a strategic partner and investor, instead of keeping unsustainable structures alive. This transformation envisages the modernization of Rijeka into a world-class refinery as well, if the support of all stakeholders is ensured.
MOL has tried on a number of occasions during the shareholders negotiations to initiate discussions about the business strategy and future of INA, including a dialogue on industry trends and economic reality. The Minister of Economy has to date shown no interest in having a serious discussion about such issues.
We took note of the recent request of the President of Croatia calling for structural reforms in Croatia to cease the administrative processes that have continuously led to financial losses and increased the country’s debts. MOL, as a responsible shareholder, will continue to support INA in line with the spirit of this request, as it is in harmony with the best commercial interests of INA.”
MOL Hungarian Oil and Gas Plc. issues this statement to correct erroneous reports that have appeared in the Croatian and international media concerning the arbitral proceedings that are currently underway between MOL and the Government of the Republic of Croatia under the UNCITRAL Arbitration Rules, and which incorrectly assert that the Arbitral Tribunal has frozen or intends to freeze MOL’s shareholding in INA.
In fact, the Tribunal specifically ruled in an order dated 16 August 2014 that it is not prepared to restrict the sale of shares in INA. Therefore, both MOL and the Government (and all other shareholders in INA) remain free to sell their shares in INA even as the arbitration proceeds. Although the 16 August 2014 order and its terms are confidential, MOL is required by law to provide this limited information in order to correct the erroneous news reports that the Tribunal has issued or will soon issue a freeze on MOL’s and the Government’s shareholding in INA.
The UNCITRAL arbitration is being administered by the Permanent Court of Arbitration in The Hague. The official seat of the arbitration is Geneva, Switzerland. The UNCITRAL arbitration was initiated by the Government against MOL on 17 January 2014, following the initiation of a separate arbitration by MOL against the Government at the World Bank’s International Centre for Settlement of Investment Disputes on 26 November 2013 (the “ICSID arbitration”). The ICSID arbitration also remains pending.
MOL Group notes with disconcertment the recent improper and manipulative media disclosure, probably by the Ministry of Economy but certainly not by MOL, regarding the last round of INA negotiations. The publication of actual conversation content is an unusual business and diplomatic practice, it constitutes a deliberate breach of negotiation confidentiality and it further undermines trust. Content selection was manipulative in that conversation snippets were taken out of context so to alter their meaning and to subvert the general public to the cause of mere propaganda by abusing the media. Therefore under the current circumstances MOL Group calls on the Ministry of Economy to disclose the full transcripts of all five negotiation rounds.
Following the conclusion of the fifth round of negotiations between the Government of Croatia and MOL Group, we are pleased to send you the official statement of MOL Group:
“Today, MOL’s negotiators came to Zagreb to once again negotiate in good faith and find answers to various important issues from the Negotiation Team of the Government of Croatia. Unfortunately, the minister could not convey to us the official position of the Government of Croatia regarding the Corporate Governance proposal submitted by INA’s Supervisory Board, nor could he confirm whether the deconsolidation of INA from MOL’s financial statements is a precondition for the Government of Croatia. Regrettably, once again we were not able to discuss business issues and, despite previous promises by the minister, we haven’t heard any suggestions how the regulatory environment could be improved. Since the above issues are of great importance for INA’s further development, we are deeply concerned that no progress has been made today. In the meantime, noting the shareholders’ full support in the strategy and the management at last month’s INA General Meeting, we will continue to support the development of INA to make it an even more successful company. MOL remains open to continuing the negotiations with the Government of Croatia.”
Today, prior to the fifth round of negotiations between the Government of Croatia and MOL Group, Mag. Dominic Köfner, CIRO, Vice President Group Corporate Communications, made the following statement to the press.
“Good morning, it’s a pleasure for me to be back in Zagreb once again with the Negotiation Team of MOL Group.
We look forward to continuing our discussions today with the Negotiation Team of the Government of Croatia and we hope to get answers regarding various important issues.
- We hope to hear from the minister the official position of the Government of Croatia regarding the Corporate Governance proposal of INA’s Supervisory Board.
- Likewise we would like to hear from the minister whether the deconsolidation of INA from MOL’s financial statements is a precondition for the Government of Croatia.
- We would also like to finally get the opportunity to discuss business issues in more detail.
- Moreover, in line with his previous promises, we are also very much interested to learn about the Minister’s recommendations about how to improve the regulatory environment in Croatia.
Thank you very much for your attention and see you later.”
“MOL Group took notice of the verdict concerning the Sanader case from the media with respect, albeit with complete and utter disappointment insofar the decision relates to alleged misconduct of MOL’s officials regarding INA. Independent and impartial fact-finding by trial courts and its effective judicial review are indispensable location factors for foreign investors, but are apparently not guaranteed without exception in present-day Croatia. MOL has never been part of the legal process, therefore we have no legal remedy against the decision. However MOL Group strongly rejects any suggestion of improper business conduct, and will continue to defend against any allegations of illegal practices. The Chairman and CEO continues to have the full confidence of the MOL Group boards. MOL’s strategy towards INA remains unaffected.”
On this occasion, we would like to react on media reports in regard with the delivery of analysis of INA's business. INA's Supervisory Board has unanimously made a decision to request the analysis of the company’s operations from the Ministry of Economy, prepared by the consulting companies AT Kearney and Oil & Gas Consulting, after some of its parts were published in media. As a company listed on Stock exchange, INA and its supervising and managing bodies have the responsibility and obligation to communicate in a clear and transparent manner all the data that could have significant impact on the share price and company`s image, which is the reason why the analysis was requested. This was not a personal decision of Mr Siniša Petrović, President of the Supervisory Board, but an unanimous decision of all Board members. We are surprised that the request of the Supervisory Board to deliver the mentioned analysis is denied especially because of the confidentiality of data while in the same time the very same data is published in the media.
We would like to inform you that after today’s negotiations with the Government of Croatia MOL Group CEO József Molnár made the following statement to the press:
“Today, our meeting was once again held in a constructive atmosphere. We agreed to meet at the end of May to accelerate the negotiations. We are ready to continue the negotiations but not at any costs.”
MOL Group Corporate Communications
We have not received any official information or indication regarding any modification to the approach or the composition of the negotiation team of the Government of Croatia. Nevertheless, we would like to point out that we have repeatedly stressed that an accelerated negotiation process is necessary in order to come to an agreement that can lead to value creation for INA and make it an even more stable and competitive company. Therefore we would welcome any initiative from the Government of Croatia that can contribute to the achievement of this goal.
MOL Group shares President Josipovic’s strong conviction that the Supreme Court of Croatia is independent and its rulings cannot be influenced by outside statements. Based on this belief, MOL Group is also confident that articles and statements linking the outcome of the Supreme Court hearing to the arbitration procedures between the Government of Croatia and MOL – indirectly elevating the criminal procedure’s outcome to the level of national interest – did not influence the Supreme Court at all. Neither did the fact that USKOK announced the indictment against MOL Chairman-CEO Zsolt Hernádi on the very first day of the Supreme Court hearing.
Let us note that precisely because of his respect for the Supreme Court did Mr. Hernádi refrain from public appearances before the conclusion of the substantive part of the Supreme Court hearing.
We would like to inform you that at the conclusion of the third negotiation round with the Government of Croatia today MOL Group CEO József Molnár made the following statement to the press:
“INA’s success is in MOL’s interest. Therefore, we are satisfied that the meeting held today to discuss the future of INA was based on a rational attitude, and the upstream development plan was discussed.
Today we were able to address the urgent need for relevant permits. According to our business plan, if we receive the relevant permits in time, INA will be able to produce additional 4300 bbl/day in short term, which can be increased to 9000 bbl/day in mid-term. This 10 and 20% additional production would mean several hundred million Kuna additional direct or indirect contribution to the Croatian economy.
Based on this meeting today we are ready to continue the negotiations in an accelerated way.”
MOL Group Corporate Communications
- MOL, as a publicly listed company, is under certain legal obligations to enforce its rights
- MOL remains open to explore a negotiated resolution
BUDAPEST, 26th November 2013 – Today, MOL announced that it filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in order to commence arbitration proceedings against the Government of Croatia for breaching certain of its obligations and undertakings in relation to MOL’s investments in Croatia.
MOL Plc. announced today that it filed a Request for Arbitration against the Government of Croatia through its legal counsel, international law firm Weil, Gotshal & Manges LLP, in order to commence arbitration proceedings under the Energy Charter Treaty in connection with MOL’s investments in Croatia. MOL has long been honoured to be a strategic partner of the Government of Croatia in its role as one of the largest foreign investors in the Croatian economy. In that spirit, MOL has always sought an amicable resolution of any disputes that have arisen between MOL and the Government of Croatia.
MOL has certain legal obligations vis-á-vis its shareholders and stakeholders to pursue good faith negotiations. However, it is also under legal obligations to commence legal action to enforce its rights.
MOL remains open to further explore a negotiated resolution to the dispute.
BUDAPEST, Hungary – 8th November 2013 – MOL hereby informs the capital market participants about its position regarding its investment in INA.
The Company’s Board of Directors authorized the Executive Board to conclude such an agreement with the Croatian Government that can lead to value creation through the execution of INA’s growth strategy. However, the Executive Board is also authorized to start the preparations for the sale of MOL’s stake in INA in order to be able to maximize the value of its investment.
At the conclusion of the negotiation round with the Government of Croatia, MOL Group CEO József Molnár made the following statement to the press:
“The meeting held today proved that there are still significant differences between the parties. Regarding the Corporate Governance of INA we firmly believe that it is in line with international best practice and in line with Croatian and European regulations. Nevertheless we are still confident that, working together with the Croatian Government, we will find a beneficial solution for the future of INA.”
MOL Group International Communications Expert
m: +36 20 254 5169 | @: firstname.lastname@example.org
MOL Group International Communications Expert
m: +36 20 409 7632 | @: email@example.com
Budapest, 07th of October 2013 - The Budapest Municipal Court today responded to the request of the Croatian State Prosecutor’s Office for the extradition of MOL Group Chairman‐CEO Zsolt Hernádi, based on a European Arrest Warrant.
The court, in a final and non‐appealable decision, declined to fulfil the request because in the criminal case forming the basis of the request – namely, bribery in international relations – a criminal investigation had already been conducted in Hungary with the conclusion that Zsolt Hernádi did not commit the crime he has been charged with by the Croatian Prosecutor.
BUDAPEST, October 3rd 2013 – Further to the statement from the Hungarian Government, MOL Group comments:
MOL Group recognizes the international and political relevance of its Croatian investments and the significance of related events over recent period.
Consistent with its general business approach, MOL Group evaluates its strategic holdings continually, as well as the shares of INA, and has a rigorous approach to ensuring that shareholders and stakeholders value is maximized, with all assets contributing to the company’s success.
Despite a vast number of unjustified actions against MOL and its Management, which appear to be influenced by interests seeking to intimidate both the company and its Chairman, and to obstruct MOL’s operation in Croatia, the Board of Directors of MOL Group will continue to apply this structured process of evaluating strategic, financial and political aims to present share values, as the Company is going to reconsider the nature of any future involvement with INA in the near future.
If there might be any decision about the possible selling of INA shares, the Croatian side does not possess the pre-emption right that the Government has gained by contracts signed in 2009, due to prior violation of these contracts. Nevertheless MOL will consult with the Croatian Government, which has already stated on many occasions about the intention of getting the operational control, in this way we consider the Croatian state as a potential buyer.
MOL Group will update the capital market and the public in time as appropriate.
BUDAPEST, October 1st 2013 – Further to the statement from the MOL Group general legal counsel dated 27 September 2013, the company comments:
Local media reports are suggesting that the Croatian authorities are about to add MOL Group Chairman and CEO, Mr. Zsolt Hernadi, to their domestic and possibly international arrest warrant lists.
Whilst Croatia may be at liberty to do so under national law, we maintain that the manner in which the Croatian authorities are currently proceeding is in contradiction to supra-national European law, which provides for an EU-wide common regime, and which Croatia has opted to be legally bound by through accession to the EU earlier this year.
MOL Group, being a Hungarian public company, is bound by Hungarian law. As a consequence, previous decisions by Hungarian authorities to dismiss the case for lack of wrong doing are legally binding on us. In addition, internal investigations have revealed no evidence of improper or illegal business practices on the part of MOL Group or any of its representatives.
Already in November 2012 MOL Group emphasized that no substantive evidence has been provided to the court in support of the specific charges as they relate to MOL.
We question whether the procedures followed with regard to the claims made against MOL are compliant with established legal procedures elsewhere in Europe and internationally. In our view, they are not compliant with the rule of law.
MOL’s corporate governance structure, consisting of Supervisory Board, Board of Directors and Executive Board is an appropriate structure to cope with all the operational issues under this challenging situation. Not being able to travel internationally until this legal case is solved in our favor would be inconvenient for Mr. Hernadi as an individual, and may hinder some protocol duties, but would not in any way impair his ability to steer the Group in his capacity as Group Chairman and CEO.
In the interest of the company and its employees MOL will defend itself by all legal means against the outrageous actions that have been taken against Mr. Hernadi and the company, which appear to be influenced by interests seeking to intimidate both the company and its Chairman.
“I have no knowledge of any request from any Croatian authority for the Chairman of MOL to be questioned in the subject. Rumors in the media have never been a sound basis for any reaction from our side.
The way I read it is, that the Croatian Court appears to be justifying the issuing of a Detention order by an alleged danger of escape, a claim which is both unreasonable and baseless.
I regard the whole case as flawed in form and substance and it appears to be influenced by interests seeking to intimidate both the company and its Chairman.
I wish to emphasize that the only legal sound basis for me is the decision of the Hungarian authorities dismissing totally this case back in January 2012 after a thorough investigation, due to lack of any criminal act and had refused to further investigate into other assertions which amount to mere speculation and unfounded allegations.”