Belka persists with PZU flotation
Allegations of backroom dealings, that Jan Rokita of the Citizen's Platform has compared to scenes from The Godfather, have unleashed a political firestorm, and jeopardized Treasury Minister Jacek Socha's compromise deal to float PZU later this year. There is now near unanimous support for an Orlen-style investigation, which most analysts expect will hinder, if not kill, what was expected to be one of Poland's largest IPOs this year.
Despite all this, Prime Minister Marek Belka has announced that his government will go ahead with the flotation. "The listing of PZU on the bourse is a very important element of the agreement with Eureko, so it should go forward whether or not an investigative committee is set up," he said.
That agreement calls for 20 percent of PZU to be sold publicly on the Warsaw Stock Exchange in May or June of this year, with the government reducing its stake in the company to 25 percent. Eureko would increase its stake to about 36 percent, the European Bank for Reconstruction and Development would buy five percent, and 14 percent would remain in the hands of employees and financial institutions.
The current scandal centers around alleged secret deals behind a 1999 government promise to sell a controlling stake in PZU to Eureko. Most upsetting is the charge that the then Finance Minister, Emil Wąsacz, offered to clear the way for the deal by dismissing the PZU president, Władysław Jamroży, only if the then president of Eureko, Joao Talone, sacked his business partner, the president of BIG Bank Gdańsk, Bogusław Kott.
Eureko is suing for breach of the 1999 deal, and the government was banking on the compromise to avoid a court battle, which it would most probably lose.
Despite all this, Prime Minister Marek Belka has announced that his government will go ahead with the flotation. "The listing of PZU on the bourse is a very important element of the agreement with Eureko, so it should go forward whether or not an investigative committee is set up," he said.
That agreement calls for 20 percent of PZU to be sold publicly on the Warsaw Stock Exchange in May or June of this year, with the government reducing its stake in the company to 25 percent. Eureko would increase its stake to about 36 percent, the European Bank for Reconstruction and Development would buy five percent, and 14 percent would remain in the hands of employees and financial institutions.
The current scandal centers around alleged secret deals behind a 1999 government promise to sell a controlling stake in PZU to Eureko. Most upsetting is the charge that the then Finance Minister, Emil Wąsacz, offered to clear the way for the deal by dismissing the PZU president, Władysław Jamroży, only if the then president of Eureko, Joao Talone, sacked his business partner, the president of BIG Bank Gdańsk, Bogusław Kott.
Eureko is suing for breach of the 1999 deal, and the government was banking on the compromise to avoid a court battle, which it would most probably lose.
