CRO GOVT ADOPTS FINANCIAL POLICE REPORT ON DUBROVACKA BANKA

( Editorial: --> 5197 ) ZAGREB, July 2 (Hina) - The Croatian Government at Thursday's session adopted a report by the Financial Police on the business operations of Dubrovacka Banka and other connected economic subjects. The Financial Police described in some 300 pages the criminal acts committed in Dubrovacka Banka's business operations, from the abuse of official positions to money laundering. All these acts were aimed at enabling individuals to obtain ownership of Dubrovnik's hotels through Dubrovacka Banka, the Government assessed. For the 93 offences, 44 law suits were filed against 37 persons. In April the Government took over 100 per cent ownership of the Dubrovnik-based bank following a discovery that it had suffered huge losses. The Government appointed a rehabilitation administrator and set aside funds for the rehabilitation of the bank. An investigation into Dubrovacka Banka's business operations was launched immediately and Financial Police Assistant Chief Inspector Branko Miloloza submitted a detailed report on the findings to the Government. Miloloza said the damages from illegal personal gain were being ascertained through legal proceedings, and the total cash drain abroad amounted to DM178 million. These resources have been transferred, Miloloza said. Because Dubrovnik's hotels are owned by Dubrovacka Banka which is now owned by the Government, Reconstruction and Development Minister Jure Radic suggested that the Government, without pre- judging the outcome of legal proceedings, ought to nominate new people to lead companies owned by the bank within the next week. Reiterating that he was not pre-judging court decisions, Radic said that the leading people were in their managing positions when the established illegal activities were taking place, such as the purchase of hotel equipment from abroad, whose price was up to 40 per cent higher than of that in Croatia. The Government adopted a motion that the Justice Ministry should follow the course of the trials and report about them once every three months, so that the court proceedings could not be extended to three, five or 10 years. Finance Minister Borislav Skegro said that after the Financial Police investigation, the Office for the Prevention of Money Laundering can now take certain measures. Skegro added that this opened the opportunity for checking the accounts of Croatian citizens in foreign banks. (hina) lml jn /mbr 021805 MET jul 98