State choosing Slovak Telekom privatisation consultant

The state is currently in the process of choosing an investment bank that will advise it on the sale of a 49-percent stake in the Slovak Telekom company (where Detusche Telekom is the other stakeholder). A committee composed of one private and two state bankers is selecting the winner, the Sme daily wrote on May 7.

The state is currently in the process of choosing an investment bank that will advise it on the sale of a 49-percent stake in the Slovak Telekom company (where Detusche Telekom is the other stakeholder). A committee composed of one private and two state bankers is selecting the winner, the Sme daily wrote on May 7.

The management of the government privatisation agency National Property Fund (FNM) will pick the advisor from among the three banks that made it to the short list: J. P. Morgan, Citi or UBS, Sme wrote.

Nova party Vice-chairman Marcel Klimek said, at a press conference on May 7, that the privatisation in question is one of the most lucrative and the government decided to choose a consultant set to help clinch the most profitable deal without any tender. The first conflict of interest lies in the fact that J.P. Morgan is corporately affiliated with Deutsche Telekom, which also has the right of first refusal, said Klimek. As for the second conflict of interest, the consultant was chosen by a three-man committee under the auspices of the Economy Ministry, with two of the committee members being subordinates to Finance Ministry State Secretary Vazil Hudák, the former J.P. Morgan vice-president who had also worked for Citibank.

Klimek claimed, as quoted by the TASR newswire, that Citibank finds itself in the conflict of interest as well, as it applies for the role of consultant along with firm called Wood and Company which drafted the government document in March 2013 on the privatisation of Slovak Telekom. “The document was drafted in the computer owned by Wood and Company,” said Klimek.

Independent MP Martin Chren added that, in violation of the shareholder agreement of the Slovak Telekom, the Memorandum on Understanding between Deutsche Telekom and Slovakia states that costs concerning the selection of an investment bank for the consultancy role in the privatisation process will be covered by the Slovak Republic, if the sum exceeds €1.25 million. According to Chren, this arrangement serves to provide a safety net for Deutsche Telekom in the case, for example, of a consultant being chosen in a non-transparent manner.

(Source: Sme, TASR)
Compiled by Zuzana Vilikovská from press reports
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