The Czech antimonopoly office (ÚOHS) is reviewing a deal for Glencore, the world’s largest commodity dealer, to purchase assets of the bankrupt edible oil producer Setuza. Swiss-based Glencore will reportedly pay for €45 million for the assets, which include brand names to which another entity claims ownership; another question is whether any of the money will be paid to the holders of Via Chem Group bonds.
According to ÚOHS, the prospective deal is for the acquisition of the companies Lisovná Ústi-nad-Labem, (oil pressing and processing plant), the company Borsay (edible oil refinery), and STZ Development (real estate), and also the brand names owned by the company Lukana Oil.
First reports of the prospective sale of the former Setuza assets to Glencore emerged towards the end of April, 2011. Setuza reportedly put the brands forward as collateral for a loan which it failed to pay back.
Nevertheless, Glencore’s acquisition of the oil brands — which include Vegetol, Ceresol Lukana which are household names in the Czech Republic and Slovakia — for €8 million could face complications: According to the daily Mladá fronta dnes (MfD), these brands were included in the bankruptcy assets of Setuza.
The bankrupt company reportedly put the brands forward as collateral for a loan, which it failed to pay back, from the Maltese-registered firm Pembroke Trading. According MfD’s information, the now bankrupt company Oleofin and the Slovenian bank NLB also claim ownership rights to the brands.
Lawyer and entrepreneur Petr Sísák, who has twice been found guilty of financial fraud, is behind all the firms and assets which are to be transferred to Glencore under the deal. The company Via Chem Group, which is majority owned by Sísák, purchased Setuza and then went about transferring its key assets to associated companies and left the remainder of Setuza to fall into insolvency.
For example, Lisovná Ústi-nad-Labem was transferred to the firm of Sísák’s lawyer, Ivo Hala & Partners and its headquarters registered at the address of Sísák’s Prague apartment, as were several other former Setuza assets. Police have launched an investigation into the transfer of some of the Setuza assets.
Money for Key Investmrents’ clients?
Sísák is also connected with the investment firm Key Investments, which recently lost its broker’s license and manages investment funds entrusted by the administrations of Prague 6, 10, 13 and also a number of municipal and district administrations outside Prague, including Sokolov and Votice.
With the public funds entrusted by those administrations, Key Investments acquired a suspiciously large quantity of bonds issued by Via Chem Group; the bonds are non-liquid, are not traded on any market and what is more, the issue of bonds by the group in 2008 and thereafter is disputed by minority shareholder Miroslav Babej-Kmec.
There is now speculation as to whether any of the funds raised by the sale of the former Setuza assets to Glencore will be paid to the public administrations that have funds tied up in Via Chem Group bonds — and are demanding the return of the sums they invested. Most of the money raised from the sale should go to the PPF Bank, J&T Bank and NLB, which held the majority of the assets in the Glencore deal as collateral for loans provided to Setuza.