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MINISTER TO RESIGN IF SHARES WENT CHEAP

Harach in VSŽ share investigation

THE FINANCIAL Markets Office has suspended the December 21 sale of a stake in steel firm VSŽ because of suspicions of price manipulation, throwing the position of Economy Minister Ľubomír Harach into doubt.
The government had sold a 21.2 per cent to the brokerage house SMD at a price far lower than other companies, including VSŽ itself, had offered.
Reacting to growing speculation that the deal had been manipulated, Harach had said prior to the suspension he would step down if and when an investigation proved there had been anything wrong with the transaction.


Economy Minister Harach is at the centre of a 30-day investigation into his role in the VSŽ share sale.
photo: TASR

THE FINANCIAL Markets Office has suspended the December 21 sale of a stake in steel firm VSŽ because of suspicions of price manipulation, throwing the position of Economy Minister Ľubomír Harach into doubt.

The government had sold a 21.2 per cent to the brokerage house SMD at a price far lower than other companies, including VSŽ itself, had offered.

Reacting to growing speculation that the deal had been manipulated, Harach had said prior to the suspension he would step down if and when an investigation proved there had been anything wrong with the transaction.

"I'm prepared to take full responsibility, even as far as to resign," the minister said on January 7. There were no immediate calls for Harach's resignation although there was widespread criticism of the deal among politicians and industry leaders.

But as The Slovak Spectator went to print support for the minister in cabinet appeared to be split.

Prime Minister Mikuláš Dzurinda rallied behind his minister, but Finance Minister Brigita Schmögnerová criticized the sale and had been among the most vocal supporters of its suspension.

Deputy Prime Minister for the Economy Ivan Mikloš refused to comment on Harach's statements.

Harach has denied that he did anything wrong in approving the sale of the shares, held by the then state firm Transpetrol, for Sk160. VSŽ itself says it had offered Sk200 per share. The state would have earned an extra Sk120 million at the higher price.

When the price for the shares was released suspicions were immediately raised that the sale had been manipulated. The Financial Markets Office will investigate the deal further to see if those suspicions are grounded.

Former Deputy PM for Integration and leader of the coalition Party of Civic Understanding (SOP) Pavol Hamžík said on January 8 it had been evident the shares could have been sold at a much higher price. "If it is proved that the minister knew about this we will demand that consequences are drawn," he said.

Harach has rejected the criticism of his actions in the sale. He has said that his ministry registered no request from VSŽ to buy the shares and that the impending sale of Transpetrol in late December forced the ministry to move quickly to take the shares out of the pipeline company's portfolio.

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