State energy firm Orlen accuses former management of criminal offences causing €1.2 billion losses

Polish state energy giant Orlen says it has notified prosecutors of possible criminal offences by the firm’s management under the former Law and Justice (PiS) government, including actions that caused losses estimated at over 5 billion zloty (€1.2 billion).

The claims have been denied by the firm’s former CEO, who says they are being made to cover up failings by the current authorities.

Orlen is Poland’s largest company, and also one of the biggest in Europe. It was led from 2018 until this year by Daniel Obajtek, a PiS politician. He was dismissed in February, two months after PiS was replaced in office by a new government led by Donald Tusk.

On Tuesday, the firm’s current management announced the findings of over 50 inspections and audits it has carried out at Orlen and other companies within the Orlen Group relating to the period between January 2016 (shortly after PiS came to power) and February 2024.

It revealed that, as a result of those audits, it has so far filed eight notifications to prosecutors of possible crimes and is preparing further ones. Another 55 audits and inspections are also still in progress and are expected to be completed by the end of the year.

Wyniki kontroli i audytów w Grupie ORLEN 👇https://t.co/4XgNCMd5Qp pic.twitter.com/2U1XRtWbVu

— Biuro Prasowe ORLEN (@b_prasoweORLEN) October 8, 2024

In the case of two of the notifications filed with prosecutors, “the actions or omissions of the previous Orlen management caused losses exceeding 5 billion zloty”, wrote the firm.

Another notification relates to 221 cases of misuse of money belonging to the company. “Members of Orlen’s former management board spent a total of 43 million zloty without business justification,” the press release reads.

“Audits in the Orlen Group also revealed the possibility of fictitious employment of employees,” they added. “These are cases where the results of the work outsourced to these individuals were not found.”

Orlen said Obajtek’s own expenses included “prosthetic and aesthetic medical services, which are reasonably suspected not to have been covered by an agreed management package and should not have been paid using a company payment card”.

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The auditors also found that Obajtek had commissioned detective services that were “not only not commercially justified, but they also served to obtain material on, among others, MPs of the then parliamentary opposition”.

During his time leading Orlen, Obajtek was often accused of using the firm’s resources to politically support the PiS government, including by artificially keeping fuel prices low during the ruling party’s unsuccessful campaign to win a third term in office last year.

In yesterday’s statement, Orlen’s new management said that an audit had found that those actions had cost the firm over 3.5 billion zloty.

“One of the key criminal investigations is being conducted in relation to suspected unjustified undercutting of wholesale and retail fuel prices relative to market prices and the unlawful release of strategic stocks,” said Orlen.

State oil firm Orlen’s wholesale petrol prices have risen this week after falling in the leadup to Sunday’s elections

Some had accused Orlen of artificially lowering prices to help the ruling party’s election campaign and warned they would rise afterwards https://t.co/FLUs1n8EA9

— Notes from Poland 🇵🇱 (@notesfrompoland) October 19, 2023

The company added that prosecutors are looking into irregularities in tender processes for the construction of Olefins III, a petrochemical plant in Płock, an investment worth 25 billion zloty.

“Verification of the planning and construction process of the Olefins III complex indicates a number of errors and abuses that may be associated with the identification of further losses,” they wrote.

However, in response to Orlen’s announcement, Obajtek dismissed the various accusations, saying that they were being made in order to “cover up for the failure” of the current authorities.

“In reality, the strength of a company is measured by profits,” Obajtek told broadcaster wPolsce24. “We earned 90 billion [zloty] for Poland, for Poles. And today a less organised group has come to Orlen, politickers who do nothing, only audits.”

“What’s more, I would like to point out that they commission these audits from their friendly law firms, so how can we talk about any credibility,” he added.

TYLKO U NAS. @DanielObajtek odpowiada na rozpoczęcie audytów w Orlenie: To jest tylko jedno wielkie przykrycie swojego nieudacznictwa https://t.co/V6Mwzf1blr

— wPolityce.pl (@wPolityce_pl) October 8, 2024

Main image credit: Krystian Maj/KPRP (under CC BY-NC-ND 3.0 PL)