Croatia jails ex-PM Sanader for 10 years over graft

Tue Nov 20, 2012 11:56am EST
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By Zoran Radosavljevic

ZAGREB (Reuters) - Former Croatian prime minister Ivo Sanader was sentenced to 10 years in prison on Tuesday for taking bribes from two foreign companies, becoming the highest state official to be convicted of corruption in the future European Union member state.

Croatia is due to join the EU in July 2013 and Sanader's conviction is likely to be seen as evidence it is cracking down on corruption. Its efforts to fight crime and graft are being carefully monitored before it formally joins the bloc.

A Zagreb county court found Sanader, 59, guilty of agreeing in 2008 to accept a payment from Hungary's energy group MOL of 5 million euros in exchange for granting it full management rights over Croatia's oil concern INA.

The ruling, against which Sanader is likely to appeal, sent MOL shares in Budapest down 3.7 percent by the close of business on Tuesday, compared with 1.5 percent fall in the main index. Market participants said earlier in the day that MOL was falling due to concerns that the court decision might prompt Croatia to review MOL's shareholder agreement with INA.

Judge Ivan Turudic also said Sanader had taken a fee from Austrian Hypo Alpe Adria Bank in 1995, when he was deputy foreign minister, that prosecutors had described as "war profiteering". Croatia's war of independence from Serbian-led federal Yugoslavia was winding down at the time.

Sanader, who looked drawn and thoughtful in court, has strongly denied wrongdoing and dismissed the trial as politically motivated. He will be detained until the appeal.

"You have damaged Croatia's reputation. Because you were a top state official, this verdict is a message to those engaged in politics that crime does not pay," Turudic said.

BENCHMARK   Continued...

Former Croatian Prime Minister Ivo Sanader sits at a county court in Zagreb November 20, 2012. REUTERS/Antonio Bronic