Agrokor proceeds with contestation of Mercator share seizure with additional foothold
Jun 20, 2020
Okrajno sodišče of Ljubljana reduces fine of EUR 53.9m imposed on Agrokor by the
Slovenian Competition Agency
With its judgment dated 1st June 2020 the Court Okrajno sodišče of Ljubljana altered the decision of the Public Competition Agency of the Republic of Slovenia (Javna agencija za varstvo konkurence Republike Slovenije, AVK) on the amount of the fine imposed on Agrokor d.d. because in 2016, at the time when Ivica Todorić managed the company and was its owner, it had not filed for assessment the acquisition of the company Costella d.o.o. The monetary fine in the amount of as much as EUR 53.9m was reduced by the Slovenian Court to EUR 1m, with the explanation that the failure to report the concentration was not the result of an “intention to bypass the reporting of the concentration in order to cause possible harmful effects on market competition”, but rather “the result of the unconscionable negligence of the responsible person Ivica Todorić”. The Court therefore assessed that the monetary fine in the amount of EUR 1m “is the appropriate and equitable sanction for the infringement in question”.
Such judgment of the Slovenian Court acknowledges Agrokor’s claims of the disproportionateness of the originally imposed fine and gives hope that the remaining argumentation of it being unsubstantiated will as well be adopted in the further procedure. Namely, Okrajno sodišče of Ljubljana has partly accepted Agrokor’s request for court protection and largely reduced the disproportionate fine imposed by AVK. However, due to the fact that the Court has not accepted all arguments, Agrokor will file an appeal against the decision with the High Court of Ljubljana and continue using legal means to contest the argumentation used by AVK in determining the alleged infringement of regulations.
The judgment of Okrajno sodišče on reducing the monetary fine additionally calls into question the validity of the seizure of Mercator shares, a measure implemented by AVK as a means of security for the execution of its ruling imposing the disproportionate fine in the amount of EUR 53.9m, which AVK extended by another six months in mid June. Agrokor shall appeal against the ruling on the extension of the seizure of Mercator shares by another six months within the legal deadline, now with the additional foothold in the judgment that reduced the originally imposed fine by 53.9 times to EUR 1m, rendering the seizure of shares, the value of which has been assessed to more than EUR 140m, completely pointless.
Fabris Peruško, CEO of Fortenova Group to which the Mercator shares should be transferred, said on this occasion: “I would like to reiterate that for its further development Mercator necessarily needs a strong and stable owner, which it would have in Fortenova Group. We still expect that the conditions for the transfer of shares will soon be met and the transfer realized by the end of this year.”