Croatian businessman arrested in London over mega bankruptcy case

A Croatian businessman was arrested Tuesday (7 November) in Britain amid allegations he embezzled millions from his retail company, leading it into a massive bankruptcy that is now an issue of national concern in Croatia.

London police said that 66-year-old Ivica Todoric, the founder of Croatia's biggest private food and retail company, Agrokor, will appear in Westminster Magistrates' Court later in the day.

Todoric was put on Europol's list of the continent's most wanted fugitives for suspected corruption, forgery of administrative documents and fraud.

He and his former aides are being investigated over the company's financial downfall. Todoric, who denies wrongdoing, has been accused of embezzling tens of millions of euros of Agrokor's funds for personal gain.

Agrokor, which began as a flower-growing operation in the former Yugoslavia in the 1970s, underwent a rapid expansion over the past decades that saw it run up debts of about €6bn (£5.3bn).

The company is so large it now accounts for about 15% of Croatia's gross domestic product and the debt is too large for the government to rescue it without endangering the state's financial stability.

Although Todoric still formally owns 95% of Agrokor, the Croatian government has taken over management of the company and is now trying to keep it alive through restructuring and negotiations with major creditors, which include Russia's state-run Sberbank.

Croatian Prime Minister Andrej Plenkovic said he was not surprised by Todoric's surrender to the London police and that he would not comment on when he will be handed over to Croatian authorities.

"Now we face the usual (extradition) procedure," Plenkovic said. "As a suspect, Todoric has his rights that I believe he will use."

Croatian President Kolinda Grabar-Kitarovic said Tuesday that the Agrokor affair is the biggest scandal in the country with "repercussions on the stability of (Croatia's) economy, creditors and suppliers."

Croatian police raided Todoric's home in Croatia last month along with the homes of former top aides.

After he appeared on Europol's fugitive arrest list, Todoric wrote on his blog that he was not hiding and that his conscience was clear.

"As a man whose human rights are deeply violated I have the right to oppose political persecution," Todoric wrote.