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Insurer falls to Meciar men By Miroslav Beblavy Close allies of Slovak Prime Minister Vladimir Meciar are in position to gain control of the country's largest insurer, Slovenska poistovna, after the state allowed its majority share in the company to slip away. By declining to take part in two rounds of stock subscription, the Slovak National Property Fund has let the state's share in the company to shrink from 50.5 percent to 40.4 percent, allowing the de-facto privatization of the company to a group of private buyers. If the buyers cooperate, the company probably will end up in the control of Alexander Rezes, campaign manager for Meciar's Movement for a Democratic Slovakia (HZDS). The new rounds of stock subscription were brought on by a decision to increase the company's share capital by 25 percent to 1.875 billion Sk ($53 million). The new shares could only be bought by the existing owners. The drive to take over SP is being led by Rezes' VSZ Holding, the eastern Slovak steel giant which owns 20.5 percent of SP and which proposed the capital increase in the first place. VSZ spokesman Jozef Marko confirmed that his company, Slovakia's biggest industrial corporation, had subscribed for all of the stock allotted to it in the first round. "We are ready to subscribe as much as allowed by other shareholders," said Marko. The result is that VSZ gained 25.6 percent of SP. Marko said that even though VSZ is interested in increasing its stake in SP, "we cannot imagine that one shareholder could gain a majority due to diffusion of ownership." Both of SP's other major shareholders, Telemar and Vinlan, have been linked by business analysts to VSZ. Each company owned approximately 8.5 percent of SP; according to unofficial reports Telmar now owns 7.6 percent and Vinlan owns 10.9 percent. Telemar bought its shares from ARDS, a company affiliated with VSZ. An analyst tracking the case and who requested anonymity said, "Everyone in the business knows they are VSZ people." Marko, on the other hand, denied any affiliation between VSZ ownership with the other shareholders of SP. Vinlan's chairman of the board, Karol Melocik, is now also the chief executive officer and chairman of SP. Together with Telemar and VSZ, these three companies could control more than 47 percent of SP. There is a clear political bond between VSZ and Vinlan, on the one hand, and HZDS, the senior government party, on the other. Jan Smerek, chairman of VSZ's supervisory board, is fourth on the HZDS candidate list for the September elections. Melocik was an HZDS deputy in the Czechoslovak Federal Parliament and then worked for Meciar's Cabinet office and the Slovak Information Service (SIS) under Ivan Lexa, one of Meciar's closest allies. Slovak opposition parties called a special session of parliament to discuss the alleged privatization. According to a March 1997 law, the insurance company cannot be privatized until at least the year 2003. However, the Aug. 19 session could not take place because it was boycotted by deputies belonging to parties in the ruling coalition. Opponents have filed three separate lawsuits to block the deal. SP's allure lies partially in its more than 25 billion Sk in technical reserves. From those reserves, at least 11 billion Sk are deposited in banks and can easily be accessed. However, Vladimir Zlacky, an analyst with ING Barings Securities, pointed out that the appeal of owning SP does not stop there. "SP owns 67 percent of Investicna a Rozvojova banka (IRB) and 72 percent of Istrobanka," he said. Their combined assets total nearly 70 billion Sk. The last important advantage of controlling SP is access to its databases, which contain information on property owned by various individuals.
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