Has the appointment of Rendulić as procurator renewed the entry of Chinese capital into Tehnika?

Mario Rendulić has been appointed as the procurator of Tehnika, as announced on the Zagreb Stock Exchange. In this way, Rendulić will join the company’s director Bojan Horvačić, but we have not received an answer regarding what his specific task will be.

Tehnika is in pre-bankruptcy proceedings and is eager for recapitalization, which Jiang Yu, a Chinese entrepreneur and co-owner of the company Zhongya Nekretnine, along with Rendulić and another Chinese national Zhenwei Li, was interested in until a few years ago.

Whether the entry of Chinese capital into Tehnika has become relevant again not only due to recapitalization is currently unknown, but Rendulić’s appointment coincides with the recent (re)decision by Hanfa regarding the mandatory offer for the takeover of Tehnika, which must be submitted by Horvačić, Zvonimir Zlopaša, Boran Poljančić, and the company Luxury Real Estate (LRE).

Namely, from the beginning, there has been talk about the connection between these three individuals and the company (all of whom are co-owners of Tehnika) for which Hanfa issued a decision back in 2019 that they must submit a mandatory offer because they collectively acquired 34.87 percent of Tehnika’s shares. Lider also wrote last April about the aforementioned trio of co-owners of Tehnika through quite complicated related relationships with the Chinese, but there is nothing in their actions, at least not visible, that compromises them.

Therefore, it may not be just about recapitalization if a Chinese takeover is indeed relevant. The aforementioned Hanfa decision from 2019 was rejected by Horvačić, Zlopaša, Poljančić, as well as LRE, claiming that they are not connected and that Hanfa cannot view their shares in Tehnika as a joint move, but rather each individually, which means that none of them would have to submit a mandatory offer in that case.

They filed a lawsuit with the Administrative Court, which rejected their arguments, and then the High Administrative Court confirmed that ruling in April of this year after appeals were submitted. Based on that, Hanfa recently issued a new (same) decision that all three, as well as the company Luxury Real Estate, are obliged to send a mandatory offer for the takeover to the other shareholders of Tehnika within the next 30 days (by the end of October).

However, what will really happen if they do not submit a takeover offer is a question that arises because, according to Hanfa’s response, the aforementioned trio and the company do not seem to face any sanctions. Indeed, Hanfa states that in the ‘Law on Takeover of Joint Stock Companies, there are provisions that allow Hanfa, if the offeror does not act in accordance with the decision, to impose a new or the same measure, as well as possible monetary fines, but it is too early to talk about further steps.’ Hanfa also states that other shareholders of Tehnika can sue Luxury Real Estate, Zlopaša, Horvačić, and Poljančić to recover damages from them for not submitting a takeover offer, which seems to be a more likely sanction for the aforementioned trio.

Still, perhaps in this light, we can also view the appointment of Rendulić as procurator, as alongside the necessary recapitalization of the company, it is not excluded that a solution to the mandatory offer problem could be found through Chinese capital. However, as we mentioned, it is difficult to predict anything as we have not received a response from Tehnika to our inquiry.