RULING FIVE PARTY COALITION ON "RIJECKA BANK AFFAIR", ORTYNSKI

ZAGREB, April 9 (Hina) - The Croatian Prime Minister and president of the Social Democratic Party, Ivica Racan, on Tuesday announced the replacement of the Head State Prosecutor. Following a meeting of the heads of the ruling coalition parties, Racan told reporters that the topic of their talks was the situation in the banking system following the criminal affair in the Rijecka Bank.#L# Asked whether State Prosecutor Radovan Ortynski had offered his resignation, Racan answered that this was a possibility. I gained the oppression that Ortynski is contemplating that option. Racan announced that the government would discuss the work of the State Prosecutor's Office at its next session on Thursday as well as the Head State Prosecutor and of a possible new candidate for that office with whom the matter still had to be discussed. We need to be more efficient and there is no point in dragging the matter out if it is decided to dismiss the Head State Prosecutor, Racan concluded. A report was presented at today's meeting of the current status of the investigation into the Rijecka Bank affair which is being conducted by the Croatian National Bank (HNB), Racan said, adding that responsibility for the crime committed in the Rijecka Bank case will only be determined following investigations by the HNB and police. He added that tomorrow it would be know who and whose behalf shares were in the bank for the highest price yet. There is evident responsibility of the main perpetrator of this crime and he is in jail. We will know about any possible accomplices once the investigation has been completed, however, we can conclude that Rijecka Bank's Board is also responsible, Racan said. He added that he couldn't see that any responsibility lay with the HNB, however, we need to learn from this episode that the HNB is obliged to operate better and it is necessary to tighten legal controls over who can audit banks and those responsible for poor investigations and reports should also be responsible for their acts, Racan added. He said that the State Agency for the Rehabilitation of Banks (DAB) needed to particularly evaluate when and how to conclude the call for tenders to purchase the Rijecka Bank. Asked about the objective responsibility of the HNB for the affair, Racan replied that some parties would actually prefer this because then the damages would have to be compensated from the state budget. Racan rejected media claims that attempts were being made to hush up any findings in the investigation of the affair in Rijecka Banka adding that the police investigation and that of the HNB were entirely autonomous. (hina) sp sb