Croatia’s market regulator filed charges to the prosecutor general against Mol Nyrt., claiming market manipulation by the Hungarian company in its purchases of shares in its Croatian unit, INA. Mol and “responsible persons” broke the law in the transactions, the Zagreb-based watchdog, known as Hanfa, said on its website today. Hanfa earlier today extended the suspension of trading in INA shares for the fifth time in two months claiming Mol has been involved in suspicious trading activities.
Our view:
Tensions between Budapest-based Mol and Croatian authorities increased after the Hungarian refiner offered to buy the shares in December. The government claimed it wasn’t notified of Mol’s intention before the offer. We do reiterate our view that probably the December offer for INA shares was a failure and now it results in political and regulatory headwinds. The worsened relationship between (2 2750 HUF, 1,56%) and the Croatian regulators also highlights the risk of revision of the INA privatization contract. Though we believe this risk is rather negligible at this point it might keep the share price of under pressure.