March 20, 2018 / 3:02 PM / a month ago

Croatia opposition calls no-confidence vote against deputy PM over Agrokor

ZAGREB (Reuters) - Croatia’s opposition on Tuesday filed a no-confidence motion against Deputy Prime Minister Martina Dalic over what it says should have been tighter control over those hired to stave off bankruptcy at indebted food concern Agrokor.

Agrokor [AGROK.UL], the largest private firm in the Balkans, was put under state administration for 15 months last April after it buckled following a rapid expansion program that left it weighed down by borrowing.

But crisis manager Ante Ramljak stepped down last month after the government voiced discontent that his former employer had been hired as a consultant on the restructuring program - potentially setting up a conflict of interests.

The opposition’s motion, proposed by the center-right “Most” (“Bridge”) party, says that Dalic, who is also the economy minister, should have known who was chosen as consultants in Agrokor and what fees were paid to them.

“Someone has to bear a political responsibility, and Dalic chose Ramljak in the first place,” Most’s parliamentary deputy Nikola Grmoja said after the motion had been submitted.

The opposition, including the biggest opposition party the Social Democrats, also accuses the government of handling the Agrokor crisis poorly. The new crisis management in Agrokor expects to have the settlement terms ready by April 10.

The ruling coalition, comprising the conservative HDZ party, the liberal HNS party and deputies from national minorities, has a tiny majority of 78 deputies in the 151-seat parliament.

While the government would not fall immediately if Dalic were to lose the vote, the tightness of the numbers would likely indicate the prime minister would no longer have control of parliament - potentially storing up problems for the future.

The vote must take place within 30 days.

“We’ll see how some of the deputies and the HDZ partners will vote as some comment in the corridors that Dalic should leave,” Grmoja said.

Dalic’s HDZ said it was confident the unity in the ruling majority would be preserved. She has said she has been focused on saving Agrokor from bankruptcy.

The Agrokor restructuring process is focused on a deal among creditors which should yield a combination of a new sustainable debt and equity. The creditors include the foreign and local banks, bondholders and suppliers whose overall claims amount to close to 60 billion kuna ($9.90 billion).

Ramljak has said his former firm was engaged by the U.S.-based chief restructuring adviser as he had to act quickly at the beginning to save Agrokor from bankruptcy and he trusted his former colleagues. He was not accused of any legal wrongdoing.

Reporting by Igor Ilic; Editing by Alison Williams

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