PZU ROW WORSENS AFTER BOARD IGNORES TREASURY INSTRUCTIONS

A politicised row between pan-European insurer Eureko and the Polish state treasury over control of leading Polish insurer PZU has worsened over the management of PZU’s life unit. Earlier this week, PZU’s board ignored treasury instructions to appoint specified candidates to the board of PZU Zycie (life) and instead threw out the subsidiary’s managers, who were blamed for blocking the wishes of the parent company’s strategic investors. The treasury responded by saying that it had lost confidence in the management of PZU, but stopped short of trying to sack them. Eureko’s COO Ernst Jansen said that “I never expected such things would happen to us in Poland after the privatisation deal we made, but now we have to live with this”. The argument has its roots in a contested share sale last year by PZU’s former chief Wladyslaw Jamrozy that would have helped Germany’s Deutsche Bank take over Polish BIG Bank, which together with Eureko had just bought 30% of PZU. Mr Jamrozy, who was well-liked by factions within the ruling Solidarity bloc, lost his job over the affair. Eureko and BIG Bank bought 30% of PZU a year ago for $650m, but have struggled to take a grip on the firm.