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Croatia's INA halts disputed contract payments after illegal sales

·2-min read
FILE PHOTO: Workers walk at INA's oil refinery in Rijeka

SARAJEVO (Reuters) - Croatia's oil and gas firm INA has halted all payments under disputed contracts after authorities accused an organised crime gang of defrauding INA 1 billion kuna ($133.8 million), the company said on Wednesday.

Last weekend, anti-corruption authorities arrested five suspects, including an INA manager, over forming a company accused of receiving low-priced supplies from mid-2020 to mid-2022 and selling them abroad for a huge profit.

The gang made 800 million kuna ($107.18 million), which they invested in property, Croatia's USKOK anti-fraud agency said.

In addition to halting payments, INA management has requested to break all disputed contracts and have also suspended all decisions and authorisations related to any fixed-price sale deals, it said in a statement.

After an internal audit by INA management that was presented to its Supervisory Board on Wednesday, INA said it had suspended the accused manager who will be fired, while all his possible helpers would be suspended from their jobs.

The Supervisory Board, which includes representatives of Hungarian oil and gas company MOL, INA's largest stakeholder with 49.08%, has requested a second audit to be done externally, the company said.

Prime Minister Andrej Plenkovic said his government, which owns a 44.84% stake in INA, condemned the plot to commit such a criminal act at the time of the greatest energy crisis.

"We shall ask from all members of the management, both Croatian and Hungarian, to bear responsibility," Plenkovic told a news conference. "We shall request to talk to MOL about launching changes in the INA management."

The parliamentary opposition caucus asked the government on Wednesday to sack the INA's management and Supervisory Board, and then to resign from office.

But Plenkovic said the fraud was revealed by the government Anti-Money Laundering Office, showing their devotion to the anti-graft fight.

($1 = 7.4640 kuna)

(Reporting by Daria Sito-Sucic; Editing by Josie Kao)