POLITICS DISSATISFIED WITH SUCCESSFUL DIRECTORS

Politicians Want to Control the Economy

Politicians of all colours are interfering in developments in the Maribor New Credit Bank, New Ljubljana Bank, Ljubljana Mercator and Nama Department Store.

AIM Ljubljana, 19 September, 1997

At the end of the summer, it seems that the right thing to do is to make a review of the wave of discharges and new appointments among the leading Slovenian entrepreneurs that occurred during the past summer. It began by establishment of the new management of the Maribor New Credit Bank which had successfully completed its financial rehabilitation, continued with temporary relieving of the management of Mercator of duty, and ended with the decision of the supervisory council to discharge the management of Nama department store in Ljubljana. In the beginning of nineties when multi-party system took root in Slovenia, majority of the people were convinced that in the field of the economy atmosphere would be more relaxed and that the influence of politics which was more than obvious in the single-party system, would gradually diminish. But, quite the opposite happened.

All political parties which have any power are by all possible means trying to influence nomination of members of management, supervisory boards and boards of directors of share-holding companies formed in the process of privatization. What consequences this could have on business operation of these firms is a special problem which obviously does not concern much the new political upstarts. The only important thing for them is to have "their" men at all prominent posts, while their knowledge and professionalism are insignificant.

After financial rehabilitation in Maribor New Credit Bank (it is the second or the third biggest bank in Slovenia), it was necessary to nominate its new management. It leaked that it was impossible for the director Andrej Hazabent to remain at the head of the Bank although he had successfully led it in the past few year. But why not? Probably because of complaints of the President of the Slovenian National Party and Vice Prime Minister Marjan Podobnik who persistently insinuated that Hazabent was in one way or another involved in various dubious business deals mostly concerning the Maribor car factory (TAM). Of course, there was absolutely no evidence for all these stories, and as concerning the legal aspect of the stories, everything is quite clear: until a man is found guilty by a court of law, he is innocent. But for some Slovenian politicians law does not mean much. Marjan Podobnik is one of them, since he himself "sentenced" Hazabent and brought inexperienced 29-year old bank clerk Matjaz Kovacic to the head of the management, because the latter is, of course, a member of the Slovenian National Party. But that was too much and the professional public rose, so that young Kovacic ended up "only" as a member of the management board, and not its president.

Approximately at the same time, changes started at the top of the New Ljubljana Bank. Various speculations circulated the lobbies, but this Bank was much too significant for Slovenian economy to allow anything to happen that would threaten it. The hitherto tandem Marko Voljc and Boris Zakrajsek managed to remain at the top and as a compromise accepted as the third in the team Alojz Jamnik who is officially still in the party of Peterle's Christian Democrats although it is possible to hear that he is also close to Janez Podobnik.

While developments in New Ljubljna Bank passed more or less peacefully, in share-holding company Mercator things reminded of Hitchcock's crime movies. Stability of the management of Mercator has never been questioned, because this company, led by Kazimir Zivko Pregl (former vice prime minister in Ante Markovic's Yugoslav Government) was very successful. Indeed it was the only one in Slovenia to get a loan of the international bank with no guarantee for reorganization and modernization of this trading company which will in a couple of months begin opening large hypermarkets of the European type round Slovenia. But despite the success, the public was in for a surprise. In the end of July, the supervisory council of Mercator relieved from duty the four-member management headed by Pregl.

This was done primarily by representatives of the employees who were afraid of massive sacking announced by Pregl. Pregl was not considered suitable by many because of his leftist political stands and Yugoslav past. But, in the background of this game was the former director of Mercator Miran Goslar who was regarded as the "father" of the Mercator system and who supported the employees. But, contrary to them, the capital has a logic of its own. The fall of Pregl and his team caused the drop of Mercator's shares on the stock exchange. Then things settled down, at the meeting which followed the supervisory board elected Pregl again to be the head of the company, the shares went up, and one of the major share-holders lodged an appeal against members of the supervisory board who had voted against the management for inflicted damage.

Just a week after developments in Mercator, the "bang" sounded in Ljubljana Nama departments store. It happened during absence (on the second day of his annual vacation) of director general Edvin Makuc. Like Mercator, Nama has also started to head towards increasing business success lately. But that did not seem to be enough for some. It has been said that politics has a finger in it too, and with the help of its satellites relieved of duty the successful director whose sin was that he was in too good relations with the Liberal Democrats.

Political parties have obviously smelled money in the air, banks are bringing certain memories to the politicians, and successful enterprises cannot stay away from politics either. Political appetites and their long term effects on the control of the banking and the monetary system is what primarily causes concern, because it would be a very poor prospect for Slovenian economy.

Milan Povirk

AIM