Croatia osiguranje withdraws from purchasing Central osiguranje

(Patria) – Croatian Croatia osiguranje has withdrawn from purchasing Central osiguranje in Bosnia and Herzegovina, it was announced on the Zagreb Stock Exchange.

"In accordance with the Framework Agreement on the Purchase and Sale of 100 percent of shares in the company Central osiguranje d.d. dated June 28, 2018, Croatia osiguranje d.d., as the buyer under the Agreement, withdraws from concluding the transaction," reads the Information that the leaders of Croatia osiguranje sent to the Zagreb Stock Exchange on January 23, 2019, reported Žurnal, referring to an official letter from that Croatian insurance company.

In a written letter to the news agency Patria, Croatia osiguranje stated that they have no additional information regarding the withdrawal from the purchase of Central osiguranje, other than the information provided in the letter to the Zagreb Stock Exchange.

'Announced leadership position'

In June 2018, it was announced: Croatia osiguranje signed agreements to purchase a hundred percent stake in Central osiguranje and Testing Grupa in Bosnia and Herzegovina, which would make it the leader in the local market.

"By taking over Central osiguranje and Testing Grupa, Croatia osiguranje BiH will increase its total market share to 13 percent and become the market leader, with strong potential for further growth in the Bosnian and Herzegovinian market," it was announced then from Croatia osiguranje.

Central osiguranje d.o.o. was founded on May 27, 2016, as a property and casualty insurance company based in Sarajevo. According to the register at the time, the founders of Central osiguranje were the College of Business Studies CEPS Kiseljak, and the company Centar gradnja Široki Brijeg. The formal owner of Centar gradnja and CEPS is Mila Ševo, the mother of businessmen Ivan and Milan Ševo.

'Suspicious deals'

According to the financial report of Centar gradnja for 2016, their total turnover was 73 thousand marks. In the founding decision of Central osiguranje, it was stated that in the same year 2016, they invested 600 thousand marks. CEPS Kiseljak reported a profit of 1.7 million marks that year and invested it all into the share capital of Central osiguranje. The following year, Central osiguranje increased its share capital from 2 million to 4 million, although Centar gradnja finished that year in the red. New owners were not listed at the time.

Agency Patria published in September 2017 that Central osiguranje withdrew from the Association of Insurance Companies in FBiH, making it the first insurance company in the Federation to take such a step. Central osiguranje is linked by the media to the top leadership of HDZ of Bosnia and Herzegovina, as well as to Central osiguranje illegally offering money to policyholders to insure their cars with that company. The Ševo family, founders of Central osiguranje, also own private schools, which were recently discovered to be selling forged high school diplomas.

Croatia osiguranje, which is the leading insurance company in Croatia, did not state whether the shaken image was the reason for their withdrawal from purchasing Central osiguranje.