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Ex-PM, finance minister heard in bankrupt shipyard inquiry

ZAGREB, Feb 24 (Hina) - Ex-finance minister Mato Crkvenac and ex-primeminister Ivica Racan on Thursday testified before a parliamentarycommission of inquiry for the Rijeka-based shipyard Viktor Lenac.
ZAGREB, Feb 24 (Hina) - Ex-finance minister Mato Crkvenac and ex-prime minister Ivica Racan on Thursday testified before a parliamentary commission of inquiry for the Rijeka-based shipyard Viktor Lenac.

Crkvenac dismissed the possibility that party or friendly relations between the former government and former Lenac director Damir Vrhovnik had affected the giving of guarantees to the shipyard.

Crkvenac said former Prime Minister Ivica Racan had never exerted pressure or sought special treatment for Lenac but asked that everything be checked thoroughly.

He said the main criterion for the guarantees had been successful business and that up to 2003 everything indicated the shipyard was stable.

Crkvenac said the government discontinued all support to Lenac after the foreign owners expressed reservations in the summer of 2003.

He added he knew nothing about the foreign companies which had entered the shipyard, companies linked to Vrhovnik or the high wages that were paid through one of those companies.

Crkvenac said he had not followed the changes in the shipyard's supervisory board and that he had not discussed Lenac's request for guarantees with anyone in the company.

He added he knew nothing about how Vrhovnik had acquired the majority share in Lenac or other events pertaining to the shipyard's privatisation before he took up the minister's post in 2000.

Crkvenac's testimony was followed by Racan's, who said that his friendship with Vrhovnik had in no way influenced his or his cabinet's decisions concerning Lenac.

The former PM said he had distanced himself from all debates the government held about the shipyard in order to avert suspicions that his cabinet was making decisions in favour of Lenac.

Speaking of his relationship with Vrhovnik, Racan said he had been in his wider circle of friends and that the friendship broke up with the failure of Vrhovnik's attempts to have the government do more for the shipyard and some of his other privatisation projects.

Asked if Vrhovnik had sponsored Racan's Social Democratic Party, the ex-PM said Vrhovnik had supported every party on the local level.

Racan dismissed any possibility that his cabinet was responsible for Lenac's bankruptcy, as recently stated by Vrhovnik. As for Vrhovnik's claims that an additional EUR2.5 million would have saved the shipyard, Racan said bankruptcy was inevitable once the owners and the creditors had walked out.

Racan said he had not been familiar with Lenac's ownership structure or the way it had been privatised.

He concluded by saying that he would do the same today because he supported every government which supported companies, regardless of risks.

Racan's testimony was followed by that of former deputy PM Slavko Linic.

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