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Slovakia: Privatization Controversy Continues

Bratislava, 7 May 1997 (RFE/RL) -- Slovakia's National Property Fund officials continue to fight handing over plant shares to an owner who acquired a stake in 1994. But the privatization officials, meanwhile, have sold a minority stake to a local company.

The sale of a 49 percent stake in the Novaky chemical plant in April to the Bratislava-based PT Nova company, comes in the wake of court battles by a Czech Republic firm to acquire shares, which it bought several years ago.

Slovakia's Government considers the Novaky chemical plant a strategic company, which should not be in the hands of Czechs - or any other foreigner.

Although Prague-based Inekon officials signed an agreement to purchase the plant in 1994 (paying about $40 million), shares were never transferred, says Inekon official Jiri Travnicek. Travnicek tells our correspondent in Bratislava that Inekon will continue to wait for a successful resolution to the issue, which confounds both Czech businessmen and Slovakia Government officials.

Slovakia National Property Fund (FNM) spokesman Oto Balogh said that, theoretically, Inekon now has a controlling 51 percent stake in the plant. However, Balogh said FNM's privatization officials will continue to fight Inekon's acquisition of the shares, and prevent their hand over.

Balogh said he did not know when the case would be resolved, claiming the FNM no longer has any shares in the chemical plant.

The local sale last month was actually to an official from the Slovak Petrimex trading company. An official at Petrimex confirmed that his company is, in fact, running PT Nova.

Inekon's Travnicek says he remains confident Inkeon will take possession of its shares sometime this year.

But the case remains unresolved. Although several Slovakia courts have ruled in Inekon's favour, Slovak FNM officials continue to stall, and the FNM's Balogh says another court case is pending and needs to be resolved first.

The contract for purchase of the Slovakia plant was signed originally in November, 1994, under Slovakia's previous government. The same day, current Premier Vladimir Meciar's supporters took control of Parliament, and immediately began trying to reverse, and then halt further privatization.

One of the targeted projects was the Novacky-Inekon deal. And, the deal has never been completed, despite a ruling in Inekon's favor by Slovakia's highest court last year.

Observers say Slovakia's privatization process remains confused, while others say it exists only in theory. They note last year's controversial sale of a 45 percent stake in a petrochemical company (Nafta Gbely) to a previously unknown Bratislava company. That angered foreign investors, who had hoped to acquire shares.

Last month, the European Bank for Reconstruction and Development (EBRD) decided to sell its nearly 11 percent stake in the Slovnaft refinery. The EBRD sale followed revelations that Slovnaft's management was allowed to 39 percent of the refinery's shares last year at lower prices than offered to the EBRD. The EBRD was set up to foster market reform in Eastern Europe.