ZOLTAN ALDOTT, a 40-year-old Hungarian manager, has been appointed the new INA CEO in the midst of ever-sharper criticism about the way MOL is running the affairs of the Croatian oil company The appointment of Zoltan Aldott as the new CEO of Croatian oil company INA has been interpreted among Croatian oil experts as a portent of significant changes in the way in which MOL is running INA. This 40-ear-old manager, namely, to date a member of the MOL board responsible for research and production, is considered one of the most competent MOL managers and well informed about INA operations and the business environment in Croatia.

Back in the late 1990s he took part in the initial negotiations on a MOL-INA merger, and worked a few years later in the first phase of the privatisation of INA. Aldott also led the process of the MOL takeover of Slovakian Slovnaft, a company that has over the years become one of MOL's most successful subsidiaries. If Aldott succeeds in achieving similar results in Croatia, INA could profit significantly in the future.

His arrival may be considered a direct response from the leadership of the Hungarian company to announcements that a parliamentary investigating committee could be set up to investigate all suspicions of violations of the law in the negotiations between Government and MOL over the distribution of management rights in the Croatian company. MPs of the opposition SDP demanded that such a committee be established a few days ago, just two days after Croatian Prime Minister Jadranka Kosor said she would personally support the idea. According to a Nacional source it is that in fact, along with the health problems of the now former head of INA Laszlo Geszti, that are the chief reasons for the shuffle at the head of the Croatian oil company. According to this information there has been a significant level of dissatisfaction in the MOL leadership for some time now with the situation in which INA currently finds itself, but also about the very negative image MOL has with the Croatian public at large.

Insofar Nacional's sources feel that he is the logical choice for a person who could repair all of the negative fallout of Laszlo Geszti's nine-month term at the helm of the Croatian oil company. "The chief result of Geszti's leadership is that MOL now has practically no friends in Croatia. The dominant sentiment in the Croatian public now is that MOL unjustly gained control of INA's operations and that it was now making moves damaging to the Croatian company. The flip side of this sentiment is the fact that on the political scene a consensus has practically been created around the idea of launching a parliamentary inquiry committee. This situation was objectively caused by numerous media write-ups concerning dubious circumstances related to the negotiations on the new contract between Government and MOL, for which Geszti is not responsible, but in which he did nothing to mitigate the negative effects of, but rather only further exacerbated them by his actions. In this kind of atmosphere MOL can hardly operate normally on the long term in Croatia, and setting up an inquiry committee could cause the company further damage."

Geszti's sacking then should be regarded in the broader context of INA's operations over the past year. He is already the second MOL manager who has been withdrawn from a top position in INA over the past few months to an advisory position in MOL. Back in December Zalan Bacs was removed from the post of executive director for refineries and marketing. Laszlo Geszti came to the helm of INA in June of last year from the post of a senior executive vice president of the MOL Group, and his appointment was interpreted through the fact that he is one of the most experienced managers MOL has, and that he served as INA vice president responsible for finances from 2003 to 2006, and as such has a very good knowledge of how the company functions. At the time INA was burdened with 1.1 billion kuna of operating losses from 2008, and it was expected above all that Geszti would stabilise the company's operations, as he is considered one of the most capable managers in MOL. But in the conditions of an economic crisis this proved a very tough assignment, and Geszti, as an exceptionally tough and inflexible manager, did not finding his footing as well as expected in the complex circumstances in which the company has found itself in the past ten months.

In a very short span of time the INA leadership found itself at odds on a number of issues with the Croatian national leadership. The first came over the company's intentions to undertake a sharp hike in the prices of oil derivatives, which Government opposed, and the second over the 1.6 billion kuna debt towards the state that INA could not cover. Finance Minister Ivan Suker on several occasions threatened to block the company's accounts as a result of the debts, and in the public eye the company was practically cast as the chief generator of illiquidity in the country. On the other hand, there was frequent speculation of alleged plans for mass job cuts in the company, the shut-down of key company facilities like the refinery in Sisak, and the sale of strategic INA assets like the oil finds in Syria. And while most of these allegations have been denied by INA, they did not succeed in preventing a growing public sentiment that the company in stagnation. Geszti largely contributed to this impression by maintaining a very reserved attitude towards the press, so much so that he did not give a single serious interview during his entire term at the head of the company. In oil industry circles the story was that he behaved likewise towards his subordinates, which allegedly resulted in a very poor atmosphere within the company.

DAMIR POLANCEC and Finance Minister Ivan Suker, who does not approve of the idea of a parliamentary inquiry committee This method of running the company significantly contributed to poorer operational results than were expected, and the ever greater impression that the company was not doing well. It was this impression in fact that has proven key to all the problems that MOL is experiencing in Croatia today. When concrete information began to surface concerning that the Hungarian company had gained management rights in INA through a series of illogical favourable terms provided for by former Deputy Prime Minister Damir Polancec, the company earned a very negative image. Every MOL move in running INA was interpreted as negative, even when it concerned entirely customary measures such as insisting on official communication in English within the company. In these circumstances it is clear why the people at the helm of MOL have decided to make changes.

Nacional's source says that as a result the relationship of MOL towards INA could change significantly in the future. "I think that the dismissal of Geszti is proof that they have grasped at MOL that they cannot go on this way. If they want to improve their image in Croatia, they will have to dedicate themselves to a much more active approach to INA operations in the future. It is, for example, unacceptable that, one the one hand, the development of INA's oil finds in Syria be halted because of an alleged lack of funds, while at the same time holding talks with Surgutneftegazom about the buyout of that company's stake in MOL, worth at least 1.4 billion euro. There is, evidently, money, and if it wants to be perceived in Croatia as a good owner, MOL will have to direct some of that money to the Croatian company. If INA was doing a brisk business, employing people, creating profits and expanding its operations, I am certain that MOL's image would be different, regardless of what took place in the negotiations with Polancec. Geszti's departure and Aldott's arrival shows that they have begun to grasp this in MOL."

In what measure Zoltan Aldott will succeed in implementing the necessary changes is difficult to say at the present juncture, but based on his previous responsibilities in the frame of MOL it can be concluded that he might be significantly more successful than Geszti was. An aggravating factor in this could certainly prove to be the announced creation of an inquiry committee in Parliament, but MOL could with a proactive business policy in INA and a more open approach in public relations certainly mitigate the negative effects that might emerge from the investigation.