EuroBusiness Media (EBM): Orco Property Group, a leading real estate investment company focused on Central and Eastern Europe, is involved in a dispute in Croatia where it has some hotel investments. Jean-François Ott welcome. You are the Chairman and CEO of Orco Property Group. What exactly is the nature of this dispute you are involved in Croatia?
Jean-François Ott (JFO): Well, you know, Orco has been investing in Central and Eastern Europe for the last twenty years. We have invested in excess of 2 billion euros. Five years ago, we won a tender that was organised by the Croatian Privatisation Fund. After we won that tender, we invested more than 65 million euros and became the biggest shareholder of the company with 55%. The CPF, the Croatian Privatisation Fund, had some obligations to fulfil. None of them were fulfilled. Orco, in exchange, had to invest some money and so we did. The crisis hit the company like it hit many others, but we kept the course and we kept working very hard. Despite that, we have been under huge pressure from the inactivity of CPF, so today I have filed a Notice of Dispute to the Prime Minister of Croatia. This document, I believe, is on her desk right now. They have three months to negotiate with us and find what I hope will be an amicable solution, or we will go to international court.
EBM: You were just recently summoned by Croatian police for questioning. What was all that about?
JFO: Well, actually it was very simple questions about some operational matters of Suncani Hvar and some payments to some suppliers. So nothing very serious. In the way I look at it, these matters should be answered by the management of the [Suncani Hvar] company and they should be cleared very easily. In any case, what I can say, and I want to make a statement about that, because I’ve seen in the press that there are some rumours that we, Orco Group, would have been involved in some kind of embezzlement of even 2 million euros, which is a huge amount, but what is really important for the people that are looking at us today is that we have invested 65 million euros in the first place - why would we steal from ourselves? It makes absolutely no sense.
EBM: Do you see your questioning by the police as directly linked to the dispute?
JFO: Totally. The manner by which the questions were asked was extremely surprising. So the motivation can only be political and linked with the fact that the CPF, the day before, during the AGM, did not vote in favour of our restructuring plan.
EBM: Do you feel discriminated against as a foreign investor investing in Croatia?
JFO: Definitely. We came to this country five years ago with a desire to invest for the long term. When you invest in real estate, you need to have five, ten, twenty years’ vision. And so we did. It’s not only 65 million euros that we have invested in the company, but it’s 65 million euros with a vision of reconstructing the hotels of Suncani Hvar and of building a new life for that company going forward. We did all this with passion, with hard work. This doesn’t happen in five minutes. Five years later, when we have made so much progress, we can see in the unfair attacks the insult and the total lack of politeness towards us as a foreign investor.
EBM: Does the ongoing dispute put your day-to-day business activities at risk in Croatia?
JFO: You know, a dispute between two shareholders is regrettable. But in our case, we have 55% of that company. We are running it, we are responsible for it, we are responsible for the jobs, we are responsible for the buildings and the clients. So for us, on an everyday basis, it’s business as usual and I’m telling all my teams today: “Guys, focus on the clients, this is the most important”.
EBM: Where do we go from here and what is your outlook for the settlement of the dispute?
JFO: Obviously, I hope that during the next three months some solution will be found between Orco and the CPF or the successor of the CFP, as it’s going to disappear as shareholder. But when you come to the company itself, Suncani Hvar, we are back to work first thing on Monday morning and we will focus on our business, our clients. We are right now working with our banks on implementing the restructuring of all the loans, things are moving forward, we are starting sales for the new season. So we are open for business and that’s the most important for Suncani Hvar and our employees.
EBM: What happens if no amicable solution is found?
JFO: Now, if after three months, a solution has not been found with the government, it’s obvious that it will go to international court, and then we will have professionals who will study the case and decide whose responsibility it is and how to protect our 65 million euros of investments. Nevertheless, I really do hope there are enough people - and I believe it’s a majority - in this beautiful country who understand their interest - their interest not only to join the EU, which is a big subject, I know, for 2011, but the simple interest of treating people properly and fairly. We have done a good job, people can go to Hvar, they can go check, the investments were made with passion and with quality. This was done and we expect to be respected for this.
EBM: Jean-François Ott, Chairman and CEO of Orco Property Group, thank you very much.
JFO: Thank you
