ANNULLED OWNERSHIP TRANSFORMATION IN HARBOUR COULD BE DAMAGING

RIJEKA, Jan 22 (Hina) - The annulment of ownership transformation in Rijeka Harbour Ltd. will considerably damage the company and its employees, without changing the ownership structure in any significant measure, managing director Miran Cofek said on Monday. The Rijeka Harbour deals with fierce competition on the world market and the harbours we compete with for cargo will try to depict us among potential customers as an insecure partner, he told a news conference in the northern Adriatic port. Cofek said an Administrative Court ruling annulling the ownership transformation did not bring into question the company's status or its ability to perform its commercial activity, nor the legality of the management board. Only the ownership structure is contentious, he asserted, stressing the value of the state's interest in it, acquired by recapitalisation, i.e. the transformation of claims into part- ownership, could in no case be less than two thirds of the entire capital. Sixteen percent of the interest is reserved for small stockholders. Cofek believes they have not been damaged in the privatisation process. Reorganisation and investment activities in the harbour, which thus far have yielded good commercial and financial results, have temporarily been put on hold. Said processes, however, and cooperation with investors from Korea and Hungary in particular, will not be brought into question, said Cofek. He stressed it was now up to the Croatian Privatisation Fund, which has to amend the ownership transformation decision within 30 days. The Administrative Court's annullment ruling met with heated public reactions. Deputy Prime Minister Slavko Linic said it constituted a "judicial crime", thus eliciting criticism, primarily among members of the judiciary who objected to his interference with their work. The Croatian Judges Association today supported the criticism Linic's statement elicited in the ruling six-party coalition, stressing the reaction proved the government's determination to have the division of authority, and the independence of the judicial authority, respected. Prime Minister Ivica Racan today criticised the Administrative Court ruling, saying he was entitled to do so because it had become final. He told Croatian Radio the ruling damaged Croatia and brought into question all efforts which had been invested to rehabilitate the Rijeka Harbour after a decade of devastation. The prime minister reminded that important agreements had been to that end, for instance with Korea and Hungary. In Linic's defence, he said the deputy had not slammed the entire judiciary but only one specific ruling. (hina) ha sb