5.5. How Slovak Power Plants was privatised by Italia’s Enel

The completed sale of the Slovak power plants to the Italian company Enel was also significant for the period of this chapter. Passages of conversations between the financier Jaroslav Haščák, the then Economy Minister Jirko Malchárek and the former chairwoman of the Executive Committee of the National Property Fund (FNM) for the SDKÚ, Anna Bubeníková, which are part of the 39 hours of recorded wiretaps from the Gorilla case, captured that the seemingly unrelated process also involved the financial group Penta. At the time, the group was interested, among other things, in the terms of a power plant purchase agreement with the company Paroplynový cyklus, which it owned.

Haščák and Malchárek discussed the staffing of important positions at the power plants and their privatisation. This is not an isolated lobbying job in the communication between business players and politicians, but the Penta partner was suggesting to Malchárek how to set the privatisation price of the power plants and arrange for the power plants to buy the Paroplyn cycle.

When selling Slovak Power Plants, the government assumed that the company’s profits would amount to around EUR 100 million in 2006-2010. However, the reality was different. In fact, after the increase in the price of electricity, the profit of the power plants was as high as EUR 973 million in that period. The important thing is that this increase in the price of electricity was not passed on in the sale price at which the state privatised its stake in the power plants, even though the Dzurinda government had already anticipated the increase. And Enel itself should have known about this. The original privatisation price was not increased even after the company’s revenues increased significantly.

The police investigated whether the assets of the power plants were deliberately undervalued at the time of the sale. After the Italians had taken over their role in Slovak Power Plants, they had the company’s assets revalued and the result was that the value of the assets was several billion Slovak crowns higher than at the time of privatisation. A special team was set up to investigate. Years later, the police raided the company’s headquarters in 2014 and took several documents from the privatisation period. A year later, the Office of the Special Prosecutor’s Office, which supervised the matter, stated that “a still unidentified perpetrator, with the intention of causing damage to the state, at the latest before the preparation of the proper financial statements for 2005, carried out purposeful operations in the accounting system in the amount of more than 15 billion Slovak crowns, and this deliberate misstatement resulted in a reduction in the value of the equity of Slovak Power Plants of more than 12 billion crowns. This impairment had a major impact on the process of the transfer for consideration of 66 per cent of the shares of the power plants.”

The damage to the state was supposed to exceed EUR 200 million. The accused were former managers. However, the Minister of Economy Malchárek, who is suspected of having arranged the unfavourable sale in return for a bribe, was not brought to justice.

He entered politics after the 1998 elections, which broke Vladimir Mečiar’s neck. He ran as a candidate for the Party of Civic Understanding, which is where former President Rudolf Schuster came from.

Four years later, he was elected to Parliament again. This time, however, for the New Citizen’s Alliance, whose main face was the controversial Pavol Rusko. Malchárek was the deputy chairman of the National Council of the Slovak Republic’s Committee on Economy, Privatisation and Entrepreneurship, the National Council of the Slovak Republic’s Committee on Control of the Use of Information and Technical Means and a member of the National Council of the Slovak Republic’s Committee on Incompatibility of Functions.

According to information from the Gorilla file, former F1 racer Jirko Malchárek was supposed to receive several hundred million Slovak crowns for himself in commissions from state deals. Malchárek was suspected of collecting commissions through his business. For example, the general meeting of the company HM INVEST, in which Malchárek owned only two percent of the shares, approved Malchárek’s bonuses of millions of euros. It was not clear what the company’s activities were, but it was known that it had done business with Penta in some projects. However, the police did not prove that the funds for the bribes of the executives behind the state deals in favour of the other parties actually flowed through the money pipelines of shell companies affiliated with HM INVEST.