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Eureko withdraws reps from PZU boards

Eureko has withdrawn its representatives from the management boards of Polish insurers PZU Life and PZU Non-Life, accusing fellow PZU board members of "ongoing harassment and intimidation."

Eureko, the largest private shareholder of PZU, said that it had withdrawn its representatives to protect them from the ongoing harassment from fellow PZU board members appointed by the Polish Ministry of State Treasury. This is the second occasion on which the Dutch insurance group has taken such action.

Eureko and PZU’s history has been fraught with difficulty. In August 2005, an international tribunal of arbitrators found that the Republic of Poland had violated the Polish-Dutch treaty on reciprocal protection of investments. The tribunal found that the discriminatory conduct of the Republic of Poland was a blunt violation of the rights of Eureko under the treaty.

Eureko claims that the State Treasury has also actively frustrated the commencement of the second phase of the arbitration with actions that flaunt the findings of the tribunal.

The Polish government replaced key members of the PZU management boards during summer 2006. Since then, the situation and the atmosphere in PZU has deteriorated further, Eureko says.

According to the insurer, the State Treasury representatives have repeatedly intimidated and harassed Eureko’s representatives on the management boards, and frustrated all efforts aimed at mutual cooperation.

Although it has withdrawn its representatives, Eureko said that it remains open to reinstating them if negotiations and proposals for a resolution to the current issues are made.