On the occasion of today’s press conference presenting the malpractices within the company Finvest Corp, we bring you a complete overview of the chronology of important events that have taken place in this firm over the last year and a half.
December 20, 2013 – Finvest Corp d.d. takes out a loan of HRK 15,000,000.00 from the Croatian Postal Bank. With this loan, it covers its own obligations as well as the matured principal loan obligations of the majority owner, Mr. Marijan Filipović, after which Finvest Corp d.d. faces liquidity problems, is unable to pay regular wages, and increases its debt to the state based on contributions and taxes. During 2014, the company faces frequent account blockages.
September 18, 2014 – The Management and Supervisory Board of Finvest Corp d.d. Čabar enter into a lease agreement for the production plant in Karlovac with the company Proizvodnja drvenih stupova d.o.o. from Karlovac. Said company was entered into the court register on September 8, 2014, only to lease “Impregnacija Karlovac” ten days later. Article 3, Paragraph 1 regulates a monthly rent in the amount of HRK 50,000.00. The director of Proizvodnja drvenih stupova d.o.o. is Stjepan Kušan, who was also the manager of Impregnacija Karlovac and a person of trust to Marijan Filipović. An insight into the 2013 annual report shows that PC Impregnacija Karlovac achieved a profit of HRK 2,206,672 in 2013. Furthermore, it is important to note that PC Impregnacija Karlovac has a concession agreement with HEP, and in the Annual Report itself, it states that this “gives them sales security and a high rate of profitability as producers.” This contract caused direct damage to the company and its workers in a minimum amount of HRK 1,600,000.00.
Therefore, by siphoning funds from Finvest Corp d.d., majority owner Marijan Filipović instigated the inability to pay wages through his actions and abused circumstances with the aim of harming creditors in order to reduce the company’s assets for his own benefit, contrary to the law, even though he knew, or should have known, that the company would not be able to continue meeting its obligations. This resulted in a piercing of the corporate veil according to the General Tax Act (Art. 26.b) and the Companies Act (Art. 10) for the entire Management and the majority owner, while criminally constituting the acts of asset stripping and money laundering.
October 16, 2014 – Following the prescribed mediation procedure, Novi sindikat announced a strike to the Management of Finvest Corp d.d. due to six (6) unpaid wages. By October 2014, according to Financial Agency (FINA) data, the debtor Finvest Corp d.d. was already blocked in the amount of HRK 98 million (over-indebted), the blockage had lasted over 174 days (illiquid), and the company owed workers 6 unpaid wages (insolvent), which indisputably met all conditions for opening bankruptcy proceedings. The workers tried to collect their unpaid wages through regular channels via a Request for Direct Payment through the Financial Agency; as this was not possible due to over-indebtedness, illiquidity, and the insolvency of their employer, the debtor Finvest Corp d.d., worker-members of Novi sindikat (62 members) organized at the end of October 2014 to initiate the collection of documentation for opening bankruptcy proceedings.
November 5, 2014 – The Management of Finvest Corp submits a Proposal for Opening Pre-bankruptcy Settlement Proceedings to FINA, along with a Request for an interim measure to stay enforcement against the account of the debtor, Finvest Corp d.d.
November 7, 2014 – Published on the FINA website were: the Proposal for Opening Pre-bankruptcy Settlement submitted on November 5 by the Management of Finvest Corp; the Conclusion of Settlement Council HR01 (consisting of Zvonimira Orešić Jaguljnjak, Lidija Bosak, and Anica Bujanić Djaković) calling the debtor to supplement the proposal by December 22, 2014 (Class: UP – I/110/07/14-01/7433, Reg. No: 04-06-14-7433-5); the Decision on the interim measure to unblock Finvest Corp’s accounts (Class: UP – I/110/07/14-01/7433, Reg. No.: 04-06-14-7433-3); and the Conclusion on the appointment of a pre-bankruptcy settlement trustee (Class: UP – I/110/07/14-01/7433, Reg. No.: 04-06-14-7433-4).
November 7, 2014 – In a letter to the Ministry of Finance (Reg. No.: 511/14), Novi sindikat warns of the abuse of provisions of the Act on Financial Operations and Pre-bankruptcy Settlement (ZFPPN) in the case of Finvest Corp, since the documentation for which the Management obtained a postponement actually represents all the documentation the debtor was legally required to submit with the initial proposal. Novi sindikat asks the competent Minister to initiate accountability for the members of the settlement council who, through their actions, prevented workers—after eight unpaid wages—from exercising their right to wages within a further unknown timeframe.
November 10, 2014 – In response to Novi sindikat’s letter sent on November 7, the FINA State Services Sector issued a statement (Class: 110-07/14-01/17, Reg. No.: 04-06-14-209) claiming that the Settlement Council’s actions were fully in accordance with the ZFPPN, citing Art. 49, Para. 1, Pt. 4 of the ZFPPN, which states that a proposal shall be rejected “if the debtor fails to supplement the proposal for opening pre-bankruptcy settlement upon the call of the settlement council so that the content of the proposal is not in accordance with the provisions of this Act.”
December 18, 2014 – The Management of Finvest Corp files a Request for an extension of the deadline for submitting documentation, explaining that the debtor “due to the extremely difficult situation with employees and the inability to pay overdue personal incomes, was not able to ensure the preparation of the prescribed documentation by the given date. As the situation in the Company has stabilized in the meantime, intensive work on the preparation of the prescribed documentation has begun.”
December 29, 2014 – Published on the FINA website were the Request for extension submitted by Finvest Corp and the Conclusion extending the deadline for missing documentation (Class: UP – I/110/07/14-01/7433, Reg. No.: 04-06-14-7433-11), as set by the Conclusion of Settlement Council HR01 (Class: UP – I/110/07/14-01/7433, Reg. No: 04-06-14-7433-5) from November 7, 2014, calling the debtor to submit the missing documentation by January 28, 2015.
January 23, 2015 – The Management of Finvest Corp files another Request for an extension with FINA, explaining that “due to the extremely difficult situation with employees and the inability to pay overdue personal incomes, the debtor was not able to ensure the preparation of the prescribed documentation by the given date. As the situation has stabilized, intensive work has begun. The company’s services have reached a high level of completion, but due to the need for an audit, the company is in danger of being unable to meet the deadlines for quality preparation.”
January 27, 2015 – Published on the FINA website was the Conclusion of the Settlement Council extending the deadline for the Management of Finvest Corp to submit missing documentation, as previously set by Conclusion Class: UP – I/110/07/14-01/7433, Reg. No: 04-06-14-7433-11 from December 29, 2014, calling the debtor to submit missing documentation by February 26, 2015 (Class: UP – I/110/07/14-01/7433, Reg. No.: 04-06-15-7433-14).
March 17, 2015 – At a meeting between the President of the Management, Mr. Viktor Horvatinović, and representatives of Novi sindikat regarding the status of striking workers in PC 2 and PC 9, the Management presents the following:
The Management confirms that production at PC 2 – Furniture Factory Čabar will cease due to unprofitability, loss of market, and the inability to ensure future operations. The 49 workers of PC 2 and part of the administration are declared redundant; workers who wish to do so will be offered positions at the Gerovo Sawmill, while those who refuse will receive business-conditioned dismissals with statutory severance pay conditioned by the length of uninterrupted service. Workers of PC 2 / accounting are called to declare their decision regarding continued work in Gerovo or business-conditioned dismissal by Friday, March 27, 2015.
April 9, 2015 – At a meeting held at the Ministry of Labor and Pension System, attended by Ministers Boris Lalovac, Mirando Mrsić, and Tihomir Jakovina, President of the Management Viktor Horvatinčić, and representatives of Novi sindikat, the union presented its position that state institutions are unlawfully favoring Finvest and its majority owner at the expense of creditors and workers. The Minister of Finance distanced himself from claims of favoritism but confirmed indications of illegal acts within Finvest and announced he would request an investigation.
