On 10 April police
in Croatia
The eight suspects
arrested were as follows:
- Marija
Šola, a former trustee and current management advisor of the bank, and mother
of three of the other suspects,
- Sandi
Šola, the bank’s largest shareholder (17.16% as of mid-2012) and former CEO,
presently a member of the bank’s supervisory board (nadzorni odbor,
i.e., board of directors) and president of the Croatian Handball Federation,
who was arrested upon his return to Croatia by car from a handball match in
Macedonia,
- Petar
Šola, managing director of the real-estate development firm “Opatovina projekt
d.o.o.”
- Tomislav
Šola,
- Luka
Miličić, former CEO of the prominent engineering/construction firm “Dalekovod
d.d.”,
- Josip
Kovač, former director of credit and guarantee operations at Karlovačka Banka,
- Marijana
Trpčić-Reškovac, a former officer of Karlovačka Banka, and
- Drago
Brekalo, business partner of Petar Šola in the company “Opatovina projekt
d.o.o.”
Sandi Šola, born 23 Oct. 1973 in Zagreb
The next morning,
11 April, customers began queuing up at the counters of branches of Karlovačka Banka
after a report appeared in the press stating that only deposits up to the
insured limit of HRK 400,000 were safe, with larger deposits being at
risk. The management of the bank
reassured journalists that all deposits at the bank were safe because there was
no possibility of the bank going bankrupt, and a press release published the
previous evening by the central bank – the Hrvatska narodna banka (HNB)
– had stated that the case being investigated by the authorities would not have
any impact on the stated book value of the bank or its system of corporate
governance, so the lines at the counters did not turn into a full bank run.
Video from Dnevnik
Video from Al Jazeera Balkans
On 11 April the central
bank issued a second press release, explaining its overall role in bank
supervision and inspection. The document
began by reassuring the public that the Croatian banking system is widely
regarded as very safe because it boasts the highest average ratio of capital
adequacy in Europe , and identified credit risks at
Croatian banks are more than covered by loss provisions and by surplus capital
above the regulatory minimum. The press
release went on to state that it is a bank’s management and supervisory board who
bear sole responsibility for the truthfulness of a bank’s financial statements,
which are then confirmed using prescribed procedures by the bank’s auditors,
who in turn guarantee the validity of the bank’s statements and business
practices to shareholders, the regulator, and the public. The press release went on to point out that
although the central bank examines a sample of banks with a frequency and scope
that are determined by the central bank’s established priorities and its
resources, nevertheless such examinations are not and cannot be frequent enough
to eliminate all possibililty of fraud or deception at a bank. The central bank added that since the
previous year it had begun implementing measures to eliminate bad business
practices at banks, including Karlovačka Banka, but that the content of the
measures applied to individual banks constitutes a trade secret and cannot be
made public.
The next day, 12
April, the press discovered and published documents indicating that several
years earlier, on 30 September 2009, the central bank had in fact commenced an
investigation of lending practices at Karlovačka Banka, and on 18 June 2010 had
filed a motion with the Misdemeanor Court in Karlovac (Prekršajni sud u
Karlovcu) to bring misdemeanor charges against Karlovačka Banka itself, its
CEO at the time, Sandi Šola, and two officers of the bank, Marijana Trpčić-Reškovac
and Siniša Žanetić. In its motion the
central bank accused Karlovačka Banka and the three officers of failing to
indicate that certain loans that the bank granted were to firms actually
related to officers of the bank, and of understating the risk attached to these
and other loans. One of the companies discussed
at considerable length in the motion was in fact “Opatovina projekt d.o.o.”,
and Petar Šola’s connection with that firm is mentioned. The Misdemeanor Court in Karlovac issued a
guilty verdict, which the defendants appealed, but in May 2012 the High
Misdemeanor Court in Zagreb (Visoki prekršajni sud u Zagrebu) issued a
final verdict, levying a fine of HRK 180,000 (€ 24,000) against the bank
itself, HRK 90,000 against Sandi Šola, and HRK 60,000 against Marijana Trpčić-Reškovac,
but the fourth defendant, bank officer Siniša Žanetić, was found innocent of
most charges and only fined HRK 10,000 for inadequately verifying whether
certain loans were being assigned to related parties. It seems likely, therefore, that the USKOK
section in the state prosecutor’s office took the central bank’s misdemeanor
case as a starting point for its investigations, which in the end turned up
evidence of a criminal conspiracy to commit bank fraud for the purpose of
real-estate speculation.
On 12 April the management
of Karlovačka Banka published the minutes of a meeting held on 8 April, two
days before the arrests, at which the management of the bank had voted to
convene on 23 May a general meeting of shareholders. The shareholder meeting is due to consider,
among other matters, a proposal to increase the bank’s share capital by HRK
20,000,000 (€ 2.6 mln) to compensate for last year’s loss of HRK 25,500,000,
raising the total share capital from HRK 85,594,050 to HRK 105,594,050 (€ 13.9
mln). This would be accomplished through
the sale of 400,000 new shares of ordinary stock, with a nominal value of HRK
50 (€ 6.57) per share.
On 13 April it was
revealed that the wives of two high-ranking Croatian intelligence officials, Milijan
Brkic and Josip Jurcevic, would also be interrogated by USKOK, since the wives
were both shareholders in the real-estate development firm “Opatovina projekt
d.o.o.” that was run by two of the individuals arrested. Although the firm had shareholder capital of
just HRK 20,000, in 2008 it received loans totaling HRK 200,000,000 from Hypo
Leasing, a subsidiary of the Austrian banking group Hypo Group Alpe Adria
(HGAA). Not long afterwards, on 30 October 2008 the two women sold their
shares to Petar Šola, one of those arrested on 10 April. The company “Opatovina projekt d.o.o.” used
these loans to buy land in the Sava Opatovina area of Zagreb
Basic financial data
on Karlovačka Banka. (N.B.: As of 31
Dec. 2012 one euro equaled 7.546 Croatian kune (HRK).)
Equity:
Share capital (dionički kapital – AOP PK
2012: 171,200,000 HRK (€ 22.7 mln)
2011: 135,000,000 HRK
2010: 166,259,000 HRK
Assets:
Total assets (ukupno imovina – AOP 017) at yearend:
2012: 1,781,353,536 HRK (€ 236.1 mln)
2011: 1,857,535,213 HRK
2010: 2,309,810,895 HRK
Loans other than to financial institutions (krediti ostalim
komitentima – AOP 012) at yearend:
2012: 728,589,105 HRK (€ 96.6 mln)
2011: 841,271,555 HRK
2010: 1,105,338,466 HRK
Liabilities:
Total deposits (depoziti – AOP 021) at yearend:
2012: 1,474,656,045 HRK (€ 195.4 mln)
2011: 1,401,170,572 HRK
2010: 1,887,261,873 HRK
Income:
Net profit (dobit/gubitak – AOP 071) for year:
2012: -25,767,384 HRK (€ -3.415 mln)
2011: -33,545,502 HRK
2010: -90,623,836 HRK
Sources:
Press
release by USKOK: Ured za suzbijanje
korupcije i organiziranog kriminaliteta: Priopćenje o provođenju
kriminalističkog istraživanja kojim je obuhvaćeno osam osoba i jedno trgovačko
društvo (2013-04-10)
Press
release
by Croatian National Bank: Što nadzire
HNB? (2013-04-11)
Press
release
by Croatian National Bank: HNB upoznat akcijom
DORH-a I USKOK-a (2013-04-10)
Press
release by
Karlovačka Bank: Priopćenje
Uprave Karlovačke banke (2013-04-10)
Karlovačka
banka: USKOK će ispitati supruge Milijana Brkića i Josipa Jurčevića
(2013-04-13 15:37:00 , updated 20:39:44 )
HNB
je protiv Karlovačke banke podnio optužni prijedlog još 2010. godine
(2013-04-12 22:09 , with scans of
entire HNB motion appended). File
containing the central bank’s motion alone: Karlovackabanka.pdf (10
MB)
ROHATINSKI
JE ŠOLI PRODULJIVAO MANDAT SVAKIH ŠEST MJESECI Jutarnji otkriva šokantno
izvješće HNB-a (2013-04-12)
NOVI
DETALJI IZ ISTRAGE USKOK-a Osumnjičenu tvrtku osnovale supruge šefova SOA-e!
(2013-04-12 09:50 )
VELIKA
AKCIJA USKOK-a Uhitili majku i dva brata većinskog vlasnika Karlovačke banke
Sandija Šole! Sprema se i njegovo uhićenje (2013-04-10 16:15 , updated 20:09 )
Uhićena
majka i dva brata Sandija Šole, šef Karlovačke banke rezervirao prvi let za
Zagreb (2013-04-10 17:22 )
Financial statements (unaudited, unconsolidated) for
period ending 2012-12-31: Tromjesečni
financijski izvještaj za kreditne institucije-TFI-KI
Financial statements (unaudited, unconsolidated) for
period ending 2011-12-31: Tromjesečni
financijski izvještaj za kreditne institucije-TFI-KI
Shareholder structure of Karlovačka banka as of
2012-06-30: Bilten
o bankama 25 - Godina 12 - Prosinac 2012
Management decision of 2013-04-08 listing proposals to
be considered at shareholder meeting on 2013-05-23: Glavna
skupština redovnih dioničara (2013-04-12)
Mark Pleas
[contact]
