Croatian TV says Orco head suspected of fraud

6th January 2011, Comments 0 comments

Croatian authorities suspect the head of Orco Property Group, a Luxembourg-based real estate development and hotel firm, and five others defrauded two million euros, national television said Wednesday.

Frenchman Jean-Francois Ott, a former head of a Croat island hotel complex in which Orco holds majority stake and "another four French nationals ... are suspected of inflicting damages ... to the tune of 16 million kunas," or 2.8 million dollars, the report said.

Police and prosecutors suspect the six took out money and "falsely presented their investments" in the complex, it said.

The Orco Group holds a 55-percent stake in the Suncani Hvar complex on the southern island of Hvar, while Croatia's privatisation fund (HFP) holds 31 percent.

Police said on Tuesday they had pressed charges against six Suncani Hvar officials suspected of abuse of power that caused the hotel complex to lose 16 million kunas.

The alleged criminal acts were committed between 2005 and 2008 after the Orco Group became a Suncani Hvar owner.

On Tuesday, Ott, who arrived in Zagreb to participate in the Suncani Hvar shareholders annual assembly, was questioned by police.

Police said he was questioned within a probe into so-called economic crimes which can include fraud and embezzlement.

After being released late Tuesday, Ott told national television that he had been questioned as a witness. He has since left Croatia, television reported.

The Orco Group and the HFP privatisation fund in 2005 concluded a deal on a public-private partnership in the Suncani Hvar complex.

But last July the HFP decided not to extend the five-year contract, accusing the Orco Group of mismanagement that resulted in insolvency.

The Luxembourg-based group rejected the move and threatened to file a lawsuit against the HFP.

© 2011 AFP

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