PZU insurer reveals mismanagement caused multi-million losses
The inception audit of PZU Group, Poland's largest insurer, for the period of 2016 – 2024 revealed irregularities under the previous government that cost the company over PLN 700 million (EUR 163 mln), the company has announced.
In a Thursday statement, PZU quoted the company's president, Artur Olech, saying that renowned external auditors and law firms conducted 26 audits in 18 areas. PZU also said that the losses described in the audit report have already been accounted for in the financial results for the past years and do not influence the current result of PZU Group.
The audit revealed that in 2016-2024, members of corporate bodies in PZU Group companies committed multiple irregularities to the detriment of the company. In most cases, the reasons for mismanagement were political and benefited the party that was in power at that time (Law and Justice or PiS - PAP) according to the company's announcement.
The irregularities included acquisition of the nearly bankrupt press distributor Ruch for PLN 270 million (EUR 63 mln), supporting media activity of the then ruling party, or unspecified advisory services for the management board amounting to PLN 45 million (EUR 10.5 mln) that brought no material effects.
Other instances relate to the employment of key managers where candidates were selected based on their political backgrounds rather than merit.
PZU said that the payroll of advisors and directors of PZU Group companies included right-wing journalists, lawyers associated with the then ruling coalition, business partners of the then management board members, politicians of the ruling party and their children. The largest individual beneficiaries received PLN 6 million (EUR 1.4 mln) each, and the earnings of some advisors exceeded PLN 220,000 (EUR 51,163) per month.
Fictitious positions were commonly created in the PZU Group, the report added.
According to PZU, the inception audit also revealed that a media house hired by PZU companies on conditions that were unfavourable to them maintained an unofficial 'black list' of publishers and media companies, considered to be anti-government, that were denied PZU advertisements, and favoured a big Catholic television broadcaster for media and other projects instead.
The company said that the first three reports about suspected criminal activity had been submitted to the prosecution, and it was working on several more.
PZU Capital Group is the biggest financial institution in Poland and Central and Eastern Europe. It is headed by PZU, a company listed on the Warsaw Stock Exchange since 2010. Other group companies include PZU Zycie SA, Link4 TU SA, TUW PZUW, Alior Bank SA, Bank Pekao SA. The group manages approximately PLN 300 billion (EUR 70 bln) in assets and serves around 22 million customers in five countries. The State Treasury has a 34.2 percent stake in the company.(PAP)
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