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CORPORATE BRIEFS

Devín Banka nominated to settle Russian debt

A row has broken out over who should be charged with the settlement of Russia's debt to Slovakia, with critics of the government charging that political ties led the Finance Ministry to give a lucrative contract to Devín Banka.

Under the government of former Prime Minister Vladimír Mečiar, the institution given the chore of administering the terms of repayment of the Russian debt to Slovakia was Devín Banka. Devín Banka's boss was Karol Martinka, the husband of a close advisor of Mečiar.

The private station TV Markíza reportedon March 4 that as financial mediator, Devín Banka had taken a 20% cut from the value of property used to settle the debt. Property worth $450 million remains in Russia to be handed over to Slovakia.

The mandatory agreement between the Finance Ministry and Devín Banka expired on December 31, 1998. However, on February 19, Finance Minister Brigita Schmögnerová reportedly sent a letter to her Russian counterpart, Michail Zadornov, asking that Devín Banka be again given the job of arranging the settlement of the Russian debt in cooperation with the Economy Ministry and state energy producer Slovenské Elektrárne (SE) .

The letter, published in the March 8 edition of the daily paper Sme, caused an uproar for two reasons; first, no public tender had been called before the job was assigned to Devín Banka, and second, that Devín Banka had been preferred on the basis of close ties between its current director, Ľubomír Kanis, and Schmögnerová and Parliamentary Speaker Jozef Migaš, both of whom are senior deputies with the former communist SDĽ party, a member of the ruling coalition.

Cabinet members offered a number of explanations as to why Devín Banka should have been chosen. Schmögnerová said that it was up to Slovenské Elektrárne to choose which bank it wanted to cooperate with on the Russian debt. "We will not order SE to do anything," she said.

Prime Minister Mikuláš Dzurinda and Deputy Prime Minister Ivan Mikloš said that they saw nothing against Devín Banka's participation in debt settlement, but stressed that the bank's obligations to the state would have to be cleared first.

Devín Banka's Kanis, for his part, told TV Markiza that Devín Banka's participation in repayments was natural given the bank's good contacts on Russian markets, chiefly in the coal and nuclear fuel sectors.

Dzurinda added that the joint Slovak-Russian Commission, which is to sit in one month, should settle all outstanding questions related to debt settlement.

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