Food Company In Financial Scandal To Be Declared Bankrupt
SARAJEVO, Yugoslavia (AP) _ Agrokomerc, a state-run food company involved in a multimillion-dollar financial scandal, will be declared bankrupt, the state-run Tanjug news agency reported Friday.
The Bosnian agricultural firm, once held up as a model of rural economic development, had issued close to $1 billion in bills of exchange with no backing since 1983.
It would have taken $50 million to keep the firm from going bankrupt and Yugoslavia has no money for ″uncertain″ investments, Tanjug said. The communist country is going through its worst economic crisis.
The Agrokomerc scandal, Yugoslavia’s biggest, was uncovered in August and triggered the resignation of Hamdija Pozderac, vice president of the Yugoslav republic of Croatia.
Several lesser-ranked officials also was dismissed.
″There is no help for Agrokomerc,″ which employs about 13,500 people in the central Yugoslav town of Velika Kladusa, Tanjug reported.
More than 1.5 million workers, or one-fourth of the country’s labor force, face losing their jobs if bankruptcy laws recently adopted by the government are rigidly implemented.
The bankruptcy law, which mandates the closure of all money-losing enterprises, was designed as one in a series of steps to curb 170-percent inflation and a growing foreign debt of $19 billion.
Bihacka Banka, the bank which endorsed the bad bills for Agrokomerc, was liquidated in September, the first bank to go bankrupt in communist Yugoslavia.