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Tuesday, August 09, 2005

Oil barons

Like everywhere I guess, oil is a dirty, slimy business in Poland.

Orlen pays the price for former president's dirty deal for Unipetrol

PKN Orlen prefers to pay over zł.300 million in fines than fulfill an extremely unfavorable contract with Czech entrepreneur Andrzej Babis. According to information revealed by Rzeczpospolita on Sunday, the contract with the highly influential businessman would secure Orlen's victory in the tender for purchasing shares in Czech oil company Unipetrol. The contract with Babis was signed by former Orlen president Zbigniew Wróbel back in April 2004. It envisaged that after winning the tender, Orlen would sell five profitable chemical companies to Agrofert, owned by Babis. The agreed price was undervalued by roughly zł.800 million. According Orlen's documents, it turns out that the company perfectly understood it would not buy Unipetrol from the Czech government without the contract with Babis. "Selling shares at such a low value looks like hidden bribe," said one of Orlen's former employees. The Kraków Prosecutor of Appeals, who is investigating the case, asked for legal assistance in the Czech Republic and it might even hear ministers of the Czech government who participated in the privatization.

PKN Orlen (Poland's oil giant) did just about everything to get a hold of this company (as is evident). But management was highly criticized for the move, especially after it had been revealed that Orlen could pay 50% more than expected for the thing. Then they were denied control of the company by shareholders because they offered a ridiculously low price for the remainer of their shares, which they were obligated to buy before they could take control. Now this.

Seems mixing oil with politics always yeilds toxic results.


Blogger Gustav said...

Hmm, that's funny. The Polish characters used to work...

8/09/2005 02:22:00 AM  

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