(Corrects wording in sixth paragraph)
* PM Orban's government says steps against MOL
* Government says has asked MOL to consider selling INA
* Croatia issued arrest warrant for MOL CEO in bribery case
* MOL has denied all allegations
* MOL, Croatia in talks over INA shareholder agreement
By Krisztina Than
BUDAPEST, Oct 2 Hungary may take legal action
against Croatia in a long-running dispute over oil and gas group
MOL's investment in Croatian peer INA, the Hungarian government
said on Wednesday after Croatia issued an arrest warrant for
MOL's chief executive.
Prime Minister Viktor Orban's government, the largest single
shareholder in MOL, said it would ask MOL's management
to consider selling its near-50 percent stake in INA to the
Croatian government or a third party, after what it said were
"unacceptable" steps taken by Zagreb against MOL.
Croatia has issued an Interpol and European arrest warrant
for MOL chief Zsolt Hernadi in a bribery case, Croatian police
confirmed to Reuters. MOL has denied all the accusations.
Relations between MOL and the Croat government have been
strained over management influence and other issues since MOL
tried and failed to become the majority owner of INA in early
Croatia has already found its former Prime Minister Ivo
Sanader guilty of accepting a bribe in 2008 from MOL to grant it
a dominant position in oil and gas firm INA, without
having to buy a majority stake. Sanader appealed against his
conviction and both he and MOL deny the charges.
An official Hungarian investigation has also found that
neither MOL nor its officials took part in the alleged bribery.
MOL and the Croatian government began negotiating a new INA
shareholder deal last month and some analysts said the fresh row
was part of tactical positioning for the talks.
Hungary's stake of 24.6 percent in MOL is a key element in
its state energy portfolio, which includes the gas units of
Germany's E.ON, as Orban tries to boost government control over
the energy sector in the country.
His government said the political campaign and legal steps
against MOL's executive showed that Croatia was trying to exert
pressure on MOL to try to regain control of INA.
"It is unacceptable for the Hungarian government that first
the strategic partner is selected ... which saves Croatia's most
important company INA during the crisis, and then there are
attempts to intimidate this strategic partner later on with
non-economic means, in order to regain control of INA without a
buyout," the Hungarian government said in a statement.
The Croatian government had no immediate comment.
"We have to look into this and see what's going on," a
source close to the government said.
The warrants for Hernadi's arrest were issued after he
failed to appear for questioning in Zagreb last month.
Croatia , which owns almost 45 percent of INA, has accused
MOL of enjoying excessive management rights and of failing to
invest in INA.
MOL says it will not give up management control and wants to
invest in INA but authorities have failed to issue necessary
"I don't think this is about (the sale of INA stake), I
think the government's suggestion is more like a tactical step,"
said Attila Vago, an analyst at Concorde. "As now that its
biggest shareholder recommends it, MOL could tell the Croats
that it would consider selling to a third party."
Another analyst said INA's upstream business and refineries
could be attractive to Russian investors. Hungary is heavily
dependent on imported energy from Russia, the region's former
"We should refresh the Russian story and think about the
geopolitical interests," Ipopema Securities analyst Norbert
Harcsa said. "Since Gazprom Neft's acquisition of (a
majority stake in) NIS in Serbia the Russians should not be
discounted as prospective buyers."
In an interview with Reuters last month, a senior MOL
official declined to say whether MOL might sell its stake in INA
if talks with Croatia failed.
He said MOL was not in talks with any potential buyers,
including Russia's Rosneft which has been tipped by some media
as a potential interested party.
MOL shares were down 1.7 percent at 15,725 forints at 1424
GMT, while the wider market was down 0.8 percent.
MOL has said Croatia's legal steps against its chief
executive were against EU law and MOL would defend itself by all
legal means against what it called "outrageous actions".
(Additional reporting by Sandor Peto, Marton Dunai and Zoran
Radosavljevic in Zagreb; Editing by Patrick Lannin and David