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PM says Privatisation Fund to be closed, three vice presidents arrested for fraud

ZAGREB, June 16 (Hina) - Prime Minister Ivo Sanader told an extraordinary news conference on Saturday that the Croatian Privatisation Fund (HFP) "will no longer exist".
ZAGREB, June 16 (Hina) - Prime Minister Ivo Sanader told an extraordinary news conference on Saturday that the Croatian Privatisation Fund (HFP) "will no longer exist".

The Maestro operation, in which six persons were arrested, including three HFP vice presidents, is not the end, Sanader said, adding that the national strategy for combating corruption would continue to be implemented.

Instead of the Fund, we shall set up some other body that, according to one suggestion, could be called the Property Agency, he said, declining to name the HFP officials who were arrested.

The arrest operation was launched this morning, leaders of the State Prosecutor's Office, the Office for the Suppression of Corruption and Organised Crime (USKOK), and the police told an earlier extraordinary news conference.

One more suspect is on the run but has been located and is about to be arrested, they said.

While preparing the operation, state institutions paid HFP officials hundreds of thousands of euros in bribes. However, the suspects asked for amounts in the millions for embezzlement involving state companies and property.

"Only for entering the deal they asked for 50,000 euros just for a coffee," said chief state prosecutor Mladen Bajic.

USKOK chief Dinko Cvitan said that a very high number of criminal acts had been committed and that the exact number of frauds in the HFP would be known only after an investigation expected to last for months.

The Croatian Agency for the Supervision of Financial Services (HANFA), the State Audit Office and the Tax Office will also be engaged in the operation to shed light on which state companies and property were privatised unlawfully. Unlawfully acquired property will be confiscated.

Bajic announced that the HFP's unlawful decisions would be annulled in criminal or civil lawsuits.

He said that the Maestro operation, which was undercover for more than a year, would have been impossible without special measures such as secret taping and undercover agents.

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