Fed up by courts, FNM abandons legal suits

In a tacit indictment of the Slovak judicial system, the head of the state privatisation agency National Property Fund (FNM), Jozef Kojda, said September 5 that his agency would not open any more legal cases over disputed past privatisations.
Speaking after submitting a report to cabinet on the progress made in investigations into dubious sales of state property between 1994 and 1998 under the Vladimír Mečiar government, Kojda told journalists that "not one of the ongoing cases" involving suspected illegal sales looked as if it would be resolved by a court decision soon. He added that the judiciary was taking far too long to bring many cases to a conclusion.
"The FNM has laid dozens of criminal charges, but not one of them, to my knowledge, has been finally and fully resolved," he said. The disputed property and shares are worth billions of crowns, the agency has said.

In a tacit indictment of the Slovak judicial system, the head of the state privatisation agency National Property Fund (FNM), Jozef Kojda, said September 5 that his agency would not open any more legal cases over disputed past privatisations.

Speaking after submitting a report to cabinet on the progress made in investigations into dubious sales of state property between 1994 and 1998 under the Vladimír Mečiar government, Kojda told journalists that "not one of the ongoing cases" involving suspected illegal sales looked as if it would be resolved by a court decision soon. He added that the judiciary was taking far too long to bring many cases to a conclusion.

"The FNM has laid dozens of criminal charges, but not one of them, to my knowledge, has been finally and fully resolved," he said. The disputed property and shares are worth billions of crowns, the agency has said.

The state body's apparent disillusionment with the courts comes after three years of trying to get to the bottom of suspected privatisation wrongdoings under the previous government. It also comes after several Slovak and international institutions have documented the public's perception of the Slovak judiciary as one of the most corrupt sectors in the country.

Battling the past

The FNM was charged with carrying out the privatisation investigations after the Mikuláš Dzurinda administration came to power in October 1998. However, of the 47 disputed privatisation contracts closed between November 5, 1994 and November 10, 1998, merely 14 have been resolved, with only one case resulting in the state's successful withdrawal from the contract. Other firms involved in such cases have gone into bankruptcy, including the once thriving shipyards, Slovenské lodenice Komárno (SLK).

Among other celebrated disputed privatisations was that of oil and gas storage firm Nafta Gbely, and the Koliba film studios. Both privatisations were connected with Mečiar and his then ruling Movement for a Democratic Slovakia (HZDS) party.

Koliba was sold in December 1995 by the FNM, which at that time was almost exclusively in the hands of HZDS-nominated bosses (six out of nine FNM members were HZDS nominees). It later wound up in the hands of two of Mečiar's children, Vladimír and Magdaléna. In 1997 and 1998 the Mečiars owned an 80% stake at Koliba.

A 46% stake in Nafta was sold to Vladimír Poór, an entrepreneur and one time regional party leader for the HZDS in Trnava region, at less than one sixth of its market value. The case surrounding the sale of Koliba - which is now billions of crowns in debt - is still in court proceedings, while the FNM reached a settlement with Poór which saw the stake returned to the FNM but no punishment for the businessman.

The privatisation agency has previously complained that the cost of bringing the cases to court was prohibitive for an organisation that is struggling to cover the redemption of privatisation bonds from the mid 1990s.

However, some have attacked Kojda's move, arguing that not only will it leave disputed privatisations involving billions of crowns unresolved, but that it will further diminish transparency in Slovak business and court dealings.

"For justice and transparency this a very bad decision," said Marek Jakoby of the thinktank Mesa 10. "Kojda is pragmatic, and as the leader of the FNM has clearly realised it's not worth pushing hard for these [new] cases, spending a lot of money, when there have been no significant results in other cases so far."

Daniela Zemanovičová of corruption watchdog Transparency International said that while the courts were prevented by a lack of resources from resolving many cases more quickly, the government had not used the available tools to fight corruption effectively.

She said she expected the past cases "will probably not be resolved before the next elections [in September 2002]."

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