20,000 CONTRACTS FOR DISCOUNT PURCHASE OF SHARES TO BE CANCELLED

ZAGREB, Nov 8 (Hina) - Croatian Privatisation Minister Ivan Penic held a press conference on Friday in connection with a Government decision to cancel a number of contracts between the Croatian Privatisation Fund and small shareholers. About 20,000 contracts for the purchase of shares at a discount were in violation of the law and would be cancelled, Penic said. He explained that one person could subscribe for shares at a discount of up to DM 20,000 in one or several companies but that the overall amount should not exceed that limit. In cases of persons who have concluded one or two discount purchase contracts unlawfully and have failed to pay them in full, those persons will be invited to pay the remaining amount up to the full value of purchased shares. If they fail to do so, the Croatian Privatization Fund (HFP) will cancel the discount clause in the contract, he said. "We will only sue parties to the contract and not third parties who have purchased the shares on the stock market or in another way, if they did so in good faith," Penic said. HFP President Milan Kovac stressed that the HFP's task was to permanently control the implementation of the Ownership Transformation and Privatization Law. "This is also part of that control. No political decisions or the forthcoming elections have affected the way we do our job," Kovac said. An inspection of the records on transactions with 650,000 small shareholders has established that 9,021 of them - about 1.5% of the total number of shareholders - violated the Transformation of Ownership and Privatisaiton Act, he specified. "The first dubious discount contracts date from 1992," Kovac told reporters. "We spotted the irregularity in early 1995," he added. According to Kovac, most of the shareholders involved were not criminals but people who did not know what they were doing. However, in cases of blatant violations the matter would be laid before the prosecutor to determine whether there were grounds for criminal proceedings. (hina) mm as 082128 MET nov 96