A special cabinet meeting called by Deputy Prime Minister Ľubomír Fogaš to discover what occured during a recent capital increase at Priemyselná Banka reached no conclusions on September 21. The matter was handed on to a higher government body - the Coalition Council - to solve.
The Hungarian coalition party (SMK), however, was not satisfied with this result and called on September 22 for the resignation of Economy Minister Černák.
On September 8, shareholders of Priemyselná Banka (PB), based in eastern Slovakia's Košice, agreed to increase the bank's registered capital by 598 million Slovak crowns to just over two billion crowns in order to help PB meet the 8% capital adequacy ratio.
State-owned companies, such as gas utility SPP, together held a majority stake in PB, and were ordered by the government to subscribe shares in an amount that allowed them to keep this majority.
This, curiously, they did not do, allowing the state's share in PB to drop to 37%, and the bank to be de facto privatised without government approval. The shares were subscribed by four private companies - Capital Invest, Capitalue S.A. Luxembourg, Prva Penzijna Investičná Spoločnosť and Tatra Reiffeisen Capital - each of which ended up with a 9.98% stake, just .02% below the limit requiring the approval of the National Bank of Slovakia.
The 'PB affair' caused a furore for several reasons. First, it was not known who actually owned the shares that were 'parked' in the four private shareholding institutions, and it was feared that the bank's 9.3% stake in steelmaker VSŽ would be used against the interests of the state during a September 25 shareholders meeting at VSŽ (see story, front page). This did not happen.
Secondly, government ministers were infuriated that state-owned companies had disobeyed direct orders from their superiors - Economy Minister Černák and Finance Minister Brigita Schmögnerová. Deputy Prime Minister Pavol Hamžík said on a televised debate September 20 that he felt the snub was indicative of how little the government was respected in the country.
27. Sep 1999 at 0:00 | SITA