Vitkovic is the former deputy of the arrested Zdravko Sestak and a long-time Podravka manager. He was appointed to the head of the company by Jurcic in an effort to calm divisions within the company Eight days ago, on Monday the 21st of December, the Croatian Peasant Party (HSS) made what is perhaps the final step in a political operation in which that party had its sights set on assuming control of Podravka. During that Monday's session of the supervisory board Miroslav Vitkovic, a HSS functionary, was picked to sit at the helm of the company, nominally because of the "intolerable situation" that had led to the arrest of the company's leadership.

Vitkovic was named to the position exactly two months after the arrest of the then chairman of the board at Podravka, Zdravko Sestak, along with some of his close associates. It was precisely those arrests that led Ljubo Jurcic, the new chair of Podravka's supervisory board, to conclude that this was an untenable situation for the company, and to name Sestak's deputy Miroslav Vitkovic as his replacement at the post of Podravka CEO. Jurcic did this in order to at least temporarily calm emotions within the company, but the appointment came without the customary procedure that should be used when companies as big as Podravka are in question.

"I appointed Vitkovic because at this moment in time it was the best solution for Podravka, but it should be a temporary solution. I did not want my decision to be interpreted as somebody winning or losing. This is why we have frozen the payout of their severance packages, but if they are not found to be guilty, they will be entitled to them. I do not wish to get involved in the political verbal exchanges and ambitions harboured by certain parties with regard to the Podravka company, but I am aware of the fact that even now my position does not suit many people," Ljubo Jurcic told Nacional.

Vitkovic was named only temporarily, until the Podravka general meeting, which should be held in February of 2010. At that meeting the issue of the company's new supervisory board should be broached, which is to be cut from 11 to 7 members, after which the newly appointed supervisory board will invite applications for the a board of directors for the company. However, as it stands the HSS currently has the strategic advantage, because their candidate Vitkovic has already become the head of Podravka, and it is very likely that the new supervisory board will see it as a logical move to also offer him their support.

Vitkovic's appointment as the head of Podravka may have come at the last minute in order to prevent any new chaos in Podravka. Sources close to the supervisory board revealed for Nacional that Vitkovic was very offended when he didn't become the head of Podravka on November 18th, when the first supervisory board meeting was held under the leadership of Ljubo Jurcic, who had agreed to take up the post at a moment of crisis for the company. When Jurcic did not immediately name him the head of Podravka, an offended Vitkovic and another board member, Marin Pucar, left the meeting. What ensued was a true drama, and Jurcic advised the two, that had he been the owner of the company, they would not only have left the session of the supervisory board, but Podravka as a whole.

That was just the beginning of the conflict between Ljubo Jurcic and the HSS. Nominally the conflict does not exist, Jurcic claims that he wants to deal only with what is of interest to Podravka, but his activities may not be in line with the political interests of the HSS, a party that views Jurcic as an enemy, regardless of how much it has publicly proclaimed otherwise.

The HSS party delegates within Podravka were unpleasantly surprised when they realized that Jurcic plans to use all of his authorities, and that he will not allow the board of directors to adopt a single decision without his knowledge. In leading the Podravka supervisory board Jurcic has three priorities - to calm tensions within the company, to prepare a financial restructuring of the company, and to prepare for the company's general meeting in February. By then the numerous new company statutes should be drafted that will regulate activities within the company much more precisely than had been the case. The new company statutes will also contain a special ordinance by which the board will not have the authority to sell any part of the company without the agreement of the supervisory board.

All of this has already begun to irritate the HSS, who see Podravka in a different light. They view Podravka in part as a means to see to the financial well-being of people important to the party, and primarily as a company through which it will be able to do various favours at a local level, thereby buying the loyalty of voters. The tension grew from day to day, and finally as a result of the "intolerable situation" Jurcic named Vitkovic as the Podravka CEO. Nominally he made the move because by law he has the authority to do so, given that the current leadership of Podravka is, in police custody, not in a position to lead the company.

Vitkovic's appointment did not pass without drama either. The move was strongly opposed by Ksenija Horvat, the workers' council representative on the supervisory board. On that occasion she said that Vitkovic had done nothing to indicate that he was capable of leading the company, neither through his behaviour, nor his previous work. Some other members of the supervisory board with whom Nacional spoke, also assert that Vitkovic has no idea of just how delicate a situation Podravka is in. He became very angry even when Ljubo Jurcic, as the chair of the supervisory board, began telling him what he should do because, allegedly, up until now he was totally unaccustomed to having the supervisory board suggest anything to him.

Miroslav Vitkovic was born in Koprivnica in 1967. In a short biography available on the company's website, it says that he graduated from university in 1992 with a degree in Nutrition and Biotechnology, and that he completed the IEDC Business School in Bled. He began working in Podravka immediately upon graduating from university, working as an import officer, as Podravka International sales director in Prague and then Bratislava, and as of 2001 as the director for the Croatia and Southeast Europe market.LJUBO JURCIC, the chair of the Podravka supervisory board, with Vitkovic and other company employees tour the plant

From 2003 to 2008 he was a member of the Podravka board of directors, covering the Croatian market. In July of 2008 he became deputy chair of the Podravka board. Despite the fact that he is an educated manager, with a local background, who for years climbed the corporate ladder in Podravka, it is interesting that his final ascent to the company's top management coincided with the fact that at the last local election he ran for Koprivnica city council on the HSS slate.

Podravka is one of Croatia's biggest food companies, which has in recent years been jointly managed by people close to the HDZ and HSS, as the state still retains almost one third of the company. The HDZ exercised its influence over the company primarily through Damir Polancec, who until recently served as Deputy Prime Minister and Economy Minister, and who joined the HDZ and took up a cabinet post a few years ago, vacating his seat as a member of the Podravka board of directors. On the other hand the HSS exerts its influence on Podravka primarily through the party president Josip Friscic, who has installed a number of his local party colleagues. While Ivo Sanader was prime minister, he personally made all key decisions in all of these and in many other important areas within Government's competence.

Three high-ranking sources from within Government confirmed for Nacional that while they were forming the current coalition Government Sanader had directly agreed with Josip Friscic that the HSS would not interfere in the decision making process with regards to construction investment, shipbuilding, oil and gas and many other sectors. In return Sanader de facto gave Friscic a wide berth to assume complete control over Podravka. Friscic was content with this, partly because he is not the most agile or cunning negotiator, and partly because that satisfied local political appetite.

Among others, he also saw to it that his personal physician found his way on to the Podravka supervisory board, also the head of the local branch of the HSS in Koprivnica. Despite all of this the HDZ continued to have a couple of its people in the company at high positions. However, HSS delegates, primarily Vitkovic, were deeply bothered that he was not formally at the head of the company, rather than former Deputy Prime Minister and Economy Minister Damir Polancec, who held most of the control over the company in his hands on behalf of the HDZ.

When, following Sanader's departure, Polancec's position in Government weakened, the HSS took advantage of this and within a little more than two months time broached the scandals that led to the arrest of many members the Podravka board of directors, culminating in Polancec's resignation. In short, the affair was opened by bringing into question transactions that were allegedly supposed to culminate with a few Podravka managers assuming total control of the company, using company funds to do so.

The HSS leadership was aware of what was happening the entire time, but brought the transactions into question because it was unclear to them how the entire process would end, opening the possibility that they might actually lose some of their political influence over the company. That is why they immediately brought these transactions into question in an effort to further increase their influence within the company, especially if those involved in the transactions were portrayed as shady characters from within the HDZ's sphere of influence. This was widely written about more than a year ago, and all of it was rehashed a little more than two months ago, when it was once again presented as robbery on the part of the Podravka managers, whose alleged goal was to take advantage of the situation and secure a controlling interest in Podravka using company funds.

The media attacks that presented the disputed transactions as theft caused serious tremors within the company, and led to the arrest of the company heads and the resignation of Damir Polancec. The entire situation hit the press spotlight only a few days after Polancec publicly clashed with president Stjepan Mesic at the Zagreb fair. The claim is that the HSS people within Podravka assessed that following that confrontation Polancec was in a difficult situation, and launched a media offensive against him by opening up the affairs within Podravka. Because Polancec's political elimination worked in the favour of some interest groups within his own party, no one from the HDZ was energetic in defended him.

Former Podravka boss Darko Marinac has been placed in custody because of financial transactions, while former Economy Minister and Deputy Prime Minister Damir Polancec, as the HDZ's man in the company, has resigned over the Podravka scandal Sources from the former Podravka board confirmed for Nacional that Miroslav Vitkovic had also agreed with some of the debated transactions, primarily the loan to the SMS company, so that Podravka could later take over that company's brands. However, Vitkovic was later opposed to the proposed privatisation model for Podravka, which would open room for a greater number of managers to take over the company. Even though the model was presented to Government and Podravka managers by the then head of Podravka Darko Marinac on a number of occasions, it was suspected that even then, a couple of years ago, Vitkovic was the source within Podravka that had presented the press with a negative view of this model of privatisation, which was even then being seen as a major privatisation scandal in the making.

That is why Podravka managers allied to Vitkovic had at the time silently excluded themselves from many meetings on the issue. It is claimed that the HSS did not like the proposed privatisation model because it would have in the future lessened its political influence over the company. Allegedly, Josip Friscic launched a harsh attack opposing the model ahead of the elections in late 2007. It was, in fact, precisely as a result of that political pressure that Darko Marinac tendered his resignation as the CEO in January of 2008, but his resignation was not accepted and he left the company in May of 2008, and even then only after months of reshuffling among HDZ and HSS people in Podravka aimed at maintaining the political balance of power within the company. It was largely due to this political reshuffling within the company that business results were not at the expected level.

The same story resurfaced a few months ago, this time to massive media pomp, leading to the arrest of the leading people at the company and shaking the entire Government. The case remains open, the suspects are in custody, and it was subsequently revealed that Vitkovic is one of the key witnesses against his former colleagues. Even thought the state prosecution has repeatedly told the public that it is in possession of thousands of pages of documentation regarding the contested transactions, no material evidence has been presented that would indicate that the managers had in fact intended to assume a controlling interest in the company, using the company's own funds to do so.

In spite of this, and as a result of the dramatic situation that was created, some concrete moves regarding the company's management had to be made. First Ljubo Jurcic appeared as the chair of the supervisory board, he then, following pressure from both Vitkovic and the rest of the HSS people, named Vitkovic to the head of Podravka. This is supposed to be a temporary solution, but it looks more and more that this appointment will become permanent, signalling the HSS's definite victory in a war they launched with the aim of bringing Podravka entirely under their control.