Croatia: The Economic Crime Legacy of the Past Decade
| Published date | 01 March 2000 |
| Date | 01 March 2000 |
| DOI | https://doi.org/10.1108/eb027264 |
| Pages | 66-69 |
| Author | Nick Ridley |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 4 No. 1
Croatia: The Economic Crime Legacy
of the Past Decade
Nick Ridley
Croatia, always harbouring ambitions of becoming
an independent nation-state, was caught off guard
during the early stages of the events of the break-up
of Yugoslavia in 1990-91 by a combination of
Slovenian and pan-Serbian planning. The Slovenian
planning was single-minded for secession, while the
Serbian factor was the ruthlessness of pan-Serbian
elements in both the JNA and the federal govern-
ment, which manipulated the military campaigns
from using limited intervention to preserve the
Yugoslav federation to armed conflict in order to
enable greater Serbia to gain as much territory as
possible. Croatian independence was eventually
gained through a combination of survivalist struggle,
improvisation, the evocative — and symbolic —
holding actions of the sieges of Dubrovnik and
Vukovar, European Union recognition of indepen-
dence, and a certain low-key tacit rapprochement
between Belgrade and Zagreb. The undoubted
achievements both of gaining independence and of
economic development in the following years,
however, have been accompanied by economic
criminality. It is this latter legacy that has created
the long-term problems that currently face the new
regime in Zagreb.
The mid-1990s in Croatia witnessed great oppor-
tunities for entrepreneurs who were willing to
work excessively hard for the ultimate comparatively
vast profits. Such individuals, while hard and aggres-
sive businessmen, were sincere and transparent in
that they were single-minded, expecting good
rewards, but fully willing to commit themselves to
the necessary hard work, and appreciative of the
opportunities.
This was the era of rise for leading entrepreneurs
like Miroslav Kutle. Under the general umbrella of
Globus Holdings, Kutle pursued an investment and
takeover pattern that was as ambitious as erratic and
illogical. An outstanding law student in the Zagreb
law faculty, he simultaneously took courses in
computer science and philosophy. Neither of these
was for graduation purposes, however. The one
was for pleasure; the other was for future use.
While at university, during the final stages, he was
already making investments and performing various
business deals. He then managed a pension fund,
took over a large restaurant, and bought a well-
known discotheque and a large discount super-
market, whose shelves he filled with products from
production facilities which he quickly acquired,
including a bakery, a coffee-roasting plant and con-
fectionery factory. These were followed by an
engineering bureau, a construction firm, more
nightclubs, and tourism facilities near Split and a
huge interest in retailing. His Jadranteskstil company
alone had 38 shops and four department stores.
Finally he acquired ownership of a newspaper,
Slobodna Dalmacija.
Another such individual is Ivica Todoric, who
started in business in tulips, selling aggressively
throughout the former federation of Yugoslavia in
the mid-1980s. During the transition period of the
mid-1990s in Croatia, he used the company,
Agrokor, to acquire a majority interest in ten other
companies, and further 20—30 per cent holdings in
three more companies within Croatia. A hunting
business followed, then, significantly, shares in one
of Croatia's banks.
Neither Todoric nor Kutle nor any of their ilk
became formally involved in politics, yet both were
close to the ruling party in the late 1990s, particularly
Kutle with his media empire of Slobodna Dalmacija.
However, when the basis of Todoric's empire,
Agrokor, suffered extreme credit problems,
Privredna Banka settled the debts. Agrokor is one
of Privredna Banka's biggest debtors. The central
bank in Croatia did not intervene.
The Croatian central bank, the National Bank, was
established in an ad
hoc
fashion, like its counterparts in
the other ex component republics of the former
federation of Yugoslavia. During such a period
state and military governmental institutions had to
be set up speedily, often with military priorities
taking government attention and resources. At pre-
sent it has little regulatory function, nor does it
have a large supervisory role in terms of applying
standards. The role of the central bank remains
comparatively non-interventionist. This is by no
Journal of Money Laundering Control
Vol.
4,
No.1,2000,
pp.
66-69
© Henry Stewart Publications
ISSN 1368-5201
Page 66
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