Merger of Orlen with Lotos. Was the process carried out correctly? Jacek Sasin comments

Luc Williams

In July 2023, the Supreme Audit Office (NIK) prepared a report regarding, among others, merger of Orlen with Lotos in 2022 after inspection by the Ministry of State Assets (MAP). TVN24 journalists found the still unpublished document. According to the Supreme Audit Office, Saudi Aramco paid PLN 7.2 billion less for the Lotos part than it was worth.

Jacek Sasin (PiS) was asked on Sunday by journalists to respond to TVN24’s reports about reduced valuations of Lotos’ parts. The politician noted that it is difficult for him to comment on the Chamber’s report, which has not yet been published. “If, on the one hand, I have valuations made by recognized, international – which no one has ever questioned – auditing companies, and on the other hand (there is) some amount that today is not supported by any methodology, then it is difficult for me to comment on it at all. No I think it is possible to question those valuations in any way,” he said.

“I am convinced that the entire process was carried out correctly, at least as far as the Ministry of State Assets is concerned, i.e. the part of the process that was in the ministry. I just have to point out that the ministry and the government mainly carried out the merger process of Orlen and Lotos, but the issues the subsequent sale of shares, or various types of ownership decisions, were made in Orlen. Of course, under some general supervision of the ministry, I am not escaping from this in any way, so I am convinced that this process was correct,” he said.

The former head of MAP appealed to discuss this matter “based on documents” because it concerns our energy security.

“First of all, I would like to see the methodology of these calculations by NIK auditors, because it amazes me. This valuation was made by renowned international companies specializing in this type of activities, therefore, if today NIK auditors question the credibility of the companies from the so-called big four audit companies, well “then they would actually have to have some very powerful evidence to prove it, or present some method of calculation that would be reliable. Until I see it, it’s hard for me to comment on it,” he said.

Merger of PKN Orlen with Grupa Lotos

In 2022, the District Court for Łódź-Śródmieście in Łódź, 20th Commercial Division of the National Court Register, registered the merger of PKN Orlen with Grupa Lotos.

Earlier, in January 2022, in accordance with EC requirements, Orlen presented remedial measures planned in connection with the takeover of Grupa Lotos. Among others it was reported that the Hungarian MOL would take over 417 gas stations of the Lotos Group network in Poland, and Orlen would buy from MOL 144 gas stations in Hungary and 41 gas stations in Slovakia. The fuel and asphalt logistics area within the Lotos Terminale company will be purchased by Unimot. Lotos Biopaliwa will be purchased by Rossi Biofuel.

As Orlen reported, it was negotiated that Saudi Aramco would buy 30 percent. shares of the Lotos Group refinery in Gdańsk and agreed a long-term contract for deliveries from PLN 200,000. up to 337 thousand barrels of oil per day, while the target volume of supplies of Saudi raw material should be 20 million tons per year.

On Monday, Orlen issued a statement in which it was noted that “the sale of part of Lotos’ assets, resulting from the implementation of remedial measures indicated by the European Commission, was carried out in accordance with the market valuation of these assets, with full respect for legal provisions and under the supervision of state authorities.” “Taking this into account, the Supreme Audit Office’s allegations against the Orlen-Lotos merger are unjustified,” the company said.

“Possibility of invalidation” of the transaction?

On Thursday in the Sejm, KO MP Roman Giertych and a group of parliamentarians appealed for the Prosecutor General and the National Prosecutor to take ex officio actions to start an investigation and secure documents regarding the merger of Orlen with Lotos. The politician also spoke about the “possibility of invalidating this transaction.”

In a statement published on the same day, Orlen said that the allegations made by a group of KO MPs regarding the merger with Lotos were groundless. “We firmly oppose the groundless allegations regarding the merger of ORLEN with Grupa Lotos, which were made at the conference of a group of MPs, including Agnieszka Pomaska, Roman Giertych and Jacek Karnowski. Such statements have no basis in reality,” reads Orlen’s statement.

The company’s letter noted that “the speculations regarding the takeover of Grupa Lotos by Orlen used during the conference are based on the report of the Supreme Audit Office, which has not even been published.” “We would like to emphasize once again that it is not known what documents were taken into account and what methodology was used by the Supreme Audit Office auditors. Without this, it is impossible to assess the reliability of the allegations made by the Supreme Audit Office. And since this cannot be stated, repeating these allegations is in the opinion of the Company itself unreliable and aims only to undermine trust in the Company and its activities,” Orlen said. (PAP)


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