Mazeikiu avoids fine, gets new CEO

  • 2007-07-04
  • By TBT staff
VILNIUS - The Vilnius Region Administra-tive Court on June 28 struck down a 32 million litas (9.3 million euro) fine imposed on the Mazeikiu Nafta refinery for alleged abuse of its dominant market position.
At the same time it was announced that Marek Mrocz-
kowski, vice-president of PKN Orlen, would become the new CEO at the refinery as of July 1.
Outgoing CEO Paul Nelson English, whom prosecutors have accused of breach of duty leading to last year's fire at Mazeikiu Nafta, the only refinery in the Baltics, was allowed to leave Lithuania on a 1 million euro bail. Previously he had been barred from leaving the country.

"After English filed an appeal and argued that it is unreasonable for him to stay in Lithuania, considering all the pros and cons, the pledge not to leave the country was substituted with bail of 1 million euros," Prosecutor Stasys Pleinys, who is investigating the case, told the Baltic News Service.
"The amount of the bail was decided taking into account the seriousness of the alleged crime and the suspect's circumstances," Pleinys added.
Prosecutors have said that Nelson's negligence may have led to the fire last October that caused some 40 million euros in damage and had a drastic impact on the company's profitability last year.
Pleinys said that Nelson had assured investigators he would cooperate as much as necessary.
English became CEO of the Mazeikiu Nafta, an oil refinery and export terminal, in December 2002.
Before moving to Mazeikiai, Mroczkowski, 46, was a board member with Unipetrol, a Czech fuel retailer controlled by the Polish concern.

Officials from PKN Orlen, which owns 90 percent of Mazeikiu Nafta, have said that the Lithuanian refinery has restored 70 percent of pre-fire capacities and was in the black in the second quarter of 2007.
Regarding the competition suit, Mazeikiu Nafta spokesman Rosvaldas Gorbaciovas was quoted as saying, "The court has passed a decision favorable for us. We have always believed that we have not breached the law. Now we will see whether there will be an end put to this story." 
The fine of 32 million litas was paid early in 2006, he said, but will now be returned to the company.
The Competition Council may appeal the court decision for 14 days.
The competition watchdog hit Mazeikiu Nafta with the penalty after having ruled that the refiner, which also operates a wholesale operator, had breached the Law on Constitution and the competition regulations of the EC Treaty.

The fine was based on an investigation that had revealed the company's alleged abuse of its dominance since prices set by Mazeikiu Nafta for its products sold on Lithuania's market exceeded those in other Baltic countries.
Prior to that instance Mazeikiu Nafta was fined twice for similar violations, each time for 100,000 litas.