Alexander Rezeš is still VSŽ boss.
Ján Smerek, Chairman of VSŽ's supervisory board and a member of parliament for the former ruling party, the Movement for a Democratic Slovakia (HZDS), admitted after the shareholders' meeting that VSŽ was facing serious financial problems. "VSŽ could not manage its own affiliations," he told the Czech news agency ČTK. "The contracts between VSŽ Holding a.s. and its affiliations have been disadvantageous for VSŽ Holding a.s."
Analysts said that VSŽ was facing liquidity problems, and was suffering as well from plunging steel prices and a general international distaste for emerging markets. "Credit lines are being stopped to entire regions, not just to individual companies," said one analyst.
But Martin Kabát, a securities analyst with Slavia Capital brokers, said that VSŽ management was trying to get the company in good enough shape to put on the selling block. "The current management are only a group of privatisers," he said. "It's quite clear they need good management, know-how and technology. They need help to make a real go of what they hold in their hands."
The meeting was called by the labour union Hutník, a.s., which feared radical layoffs as VSŽ struggled to streamline its operations. "Perhaps it will be necessary to decrease the number of company personnel, particularly in the non-production sector," said Jaroslav Gruber, Chairman of the board of Directors at Hutnik, which controls over 10% of VSŽ shares. "But there will be no massive dismissal of employees."
At the October 23 meeting, members of the board of directors and vice-presidents Lubomir Solár, Igor Grega and Viktor Haber were withdrawn from their posts. Milan Jurko (48), until now the general director of VSŽ subsidiary Ferroenergy, a.s. and Jozef Busa (54), personnel director of VSŽ-owned engineering firm Vihorlat Snina, were appointed new members of the board of directors for marketing and management and control, respectively.
In accordance with a trend that is sweeping powerful firms like state bank VÚB and state insurer Slovenská poisťovňa in the last days of the outgoing government of former Premier Vladimír Mečiar, shareholders also approved changes to the statutes of the company that significantly increased the powers of the supervisory board and strengthened the positions of its members. "The point of these changes is that the new people will not be able to be budged from the company after the new government takes power," said Kabát.
From now on, members of the board of directors will be elected by the supervisory board, not by a plenary assembly. Furthermore, changes to the supervisory board and to the basic capital and strategy of the company can only be made at a plenary assembly attended by at least 55% of shareholders. Supervisory board shuffles require the support of at least two thirds of shareholders attending the assembly.
VSŽ management stated that further major organisational changes in the company were scheduled for January 1, 1999.
2. Nov 1998 at 0:00 | Tom Nicholson