Almost three years after the initiation of insolvency proceedings against OKD, Zdeněk Bakala, the mining company’s former owner, has weighed in on its collapse.
Zdeněk Bakala, former OKD majority owner, will not enter the proceedings determining the validity of the Citibank company’s claim. It is in the conclusion of a statement that Bakala sent to the Regional Court in Ostrava.
Receivables Management OKD company invited Bakala previously to join Citibank in litigation.
However, Zdeněk Bakala disagrees with the invitation and argues that the claim’s denial is political.
“It is obvious that the arguments in this litigation are not primarily based on facts, but on previously arisen political needs, which led to an attempt to scandalize Zdeňěk Bakala as an individual and create a fake story about how he led OKD to an alleged decline,” said Šárka Samková, Zdeněk Bakala’s spokesperson.
And Zdeněk Bakala goes even further in his presentation. “One of the plaintiff’s tabloid fallacies is that since 2006, allegedly, the plot against OKD has been staged and, on top of it all, that Citibank took part in it,” Zdeněk Bakala writes. “Even more absurd is the idea that in 2006, OKD’s decline was pre-programmed (with Citibank’s participation) – however, that decline did not come until the year 2016, when the plaintiffs themselves took care of it.”
By that, he refers to OKD Receivables Management’s (SP OKD) and insolvency administrator’s statement, who connect the restructuring of 2014 debt (which creates the 10 million commitment exacted by Citibank), with a loan which NWR already received from Citibank in 2006.
However, according to the insolvency administrator Lee Louda, the connection between the financial transactions from both 2014 and 2006 had been proven.
“This restructuring was only a solution of an uncomfortable situation conceived in 2010 by the acceptance of an intergroup credit which has its roots back in 2006, when a major transformation of OKD took place” reacted the insolvency administrator Lee Louda to former OKD owner’s statement.
Both him and SP OKD state that one of the reasons why they refuse to recognize the claim is the fact that the mining company was in technical decline in 2014, therefore they could not accept such restructuring.
“Claims and bond restructuring in 2014 did not contribute to the decline of the then already indebted OKD. If it helped anyone, it was definitely not this company or its creditors or employees,” said Louda. “The costs of the prepared restructuring were around 40 million EUR. Meaning that approximately 1,1 billion CZK was spent on a process which only delayed the inevitable decline.
And the SP OKD board’s chairman Jan Solich agrees with him. “Several arguments in the quoted statement are not based on truth. Evidence was carried out by expert opinions within the ongoing court proceedings, which imply that the roots of the company’s decline are somewhere around the year 2007,” he says.
Findings of the TV program CT Reporters, which claims that they received the loan agreement from 2006, also speak in favor of the insolvency administrator and SP OKD.
“OKD company will use all of its money, which it borrowed according this loan agreement, to pay Karbon Invest or its (…) shareholders,” says the contact between Citibank and OKD.”
“Within the creation of a medially pleasing story about pre-programmed decline, SP OKD purposefully mentions only the dividend distribution. It’s because immense investments have been made into OKD by NWR, beside others into machinery or safety, as well as repeated pardoning of significant OKD’s debts or other financial aids in tmes of OKD’s need,” Bakala’s spokesperson Samková reacted.
Approximately 1,1 billion CZK was spent on a process which only delayed the inevitable decline, according to OKD’s insolvency administrator.
“The restructuring was only a solution of an uncomfortable situation conceived in 2010 by the acceptance of an intergroup credit.” Lee Louda, OKD’s insolvency administrator.