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PiS compares the long-term earnings of the heads of state-owned companies with one-year losses. “Rude Manipulation”

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Law and Justice on Twitter published three illustrations comparing the long-term earnings of the heads of state-owned companies with the losses they incurred. But the data was used selectively. We reached for the results of Orlen, Lotos and JSW and we present all the information.

On June 15, on the official accounts of Law and Justice in social media, graphics marked with the hashtag #MilionerzyzPO were published. They list the earnings of four presidents of state-owned companies who held their positions during the rule of the PO-PSL coalition: Jarosław Zagórowski and Edward Szlęk from Jastrzębska Spółka Węglowa (JSW), Jacek Krawiec from PKN Orlen and Paweł Olechnowicz from Grupa Lotos. Zagórowski and Szlęk were to earn a total of over PLN 5 million in 2010-2015, Krawiec in 2008-2015 over PLN 21 million, and Olechnowicz in 2008-2015 almost PLN 7 million.

The illustrations also show the loss of all three companies in 2014: in JSW it was to be over PLN 657 million, in Orlen over PLN 5.8 billion, and in Lotos over PLN 1.4 billion. The message from the graphics was to be that despite the high earnings of the CEOs, their companies were loss-making.

Entries about #Millionaires from PO published by PiS.Twitter

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The graphics were published three days after they appeared on the Wirtualna Polska portal series of articles about the “club of millionaires ‘good change'”, i.e. 152 people associated with PiS, to whom listed companies of the Treasury have paid a total of over PLN 437 million in salaries and up to PLN 45 million in awards since 2015.

Some commentators on the ruling party’s account, however, accused the authors of the graphics of manipulation, noting that they compare several years of CEOs’ earnings with only one year when the companies recorded a loss. “Only an idiot wouldn’t notice this crude manipulation. Earnings from 5 years, loss from one selected year. It would be fair to compare the same periods in both data, but with you honesty is a moon concept” – he commented blogger Jacek Liberski (original spelling of all entries). “Traditional PiS manipulation, i.e. manipulation of the date range. They compared the total earnings from several years, i.e. 2010-2015, to … losses in only one selected year, 2014. They did not mention profits in other years from this period” – she wrote Alicja Defratyka, an economist.

The analysis of the annual reports of all three companies, suggested by commentators, shows that PiS deliberately chose 2014 to show losses, because in the full period for which data on CEOs’ salaries were provided, the companies recorded a profit.

JSW: PLN 1.2 billion profit

According to the graphics on the PiS account, two presidents of Jastrzębska Spółka Węglowa (JSW) in 2010-2015 were to earn over PLN 5 million, and the company’s loss in 2014 was to amount to over PLN 657 million.

Jarosław Zagórowski was the president of the management board of Jastrzębska Spółka Węglowa from March 2007 to February 2015, so he took this position during the rule of PiS with Samoobrona and the League of Polish Families. His successor – Edward Szlęk – held his position for only five months, from April to September 2015, after which he resigned due to his health. The company’s reports show that in the period 2010-2015 mentioned in the graphic, both presidents earned a total of PLN 5.58 million, of which the vast majority – PLN 4.93 million – were the earnings of Jarosław Zagórski.

In the same period, from 2010 to 2015, the company recorded profits of PLN 4.64 billion and losses of PLN 3.47 billion. JSW’s balance sheet in this period is PLN 1.17 billion in profit.

JSW’s loss from 2014 after verification amounted to PLN 684 million, which is even more than indicated in the graphic. At that time, the company explained that the loss resulted mainly from the lowest prices for its main product, i.e. coking coal, in years. “Last year, the macroeconomic environment, which we had no influence on, was exceptionally unfavorable to us. The prices of coking coal – already low – continued to fall. Our response had to be to start implementing extensive changes in the company on the cost side” – explained the acting president JSW Jerzy Borecki quoted in the company’s announcement from March 2015.

Orlen: PLN 2.9 billion profit

According to the graphics on the PiS account, the president of PKN Orlen, Jacek Krawiec, was to earn over PLN 21 million in 2008-2015, and the company’s loss in 2014 was to amount to over PLN 5.8 billion.

Jacek Krawiec was the president and CEO of PKN Orlen from September 2008 to December 2015 (earlier, he was the vice-president of the management board for three months). From December 2008 to January 2016, he was also the chairman of the supervisory board of the Czech refining holding company Unipetrol belonging to the Orlen Group. According to the company’s reports, in the period 2008-2015 he earned a total of PLN 21.79 million, including bonuses, and PLN 25.2 million including severance pay.

In the same period, from 2008 to 2015, the company recorded profits of PLN 11.26 billion and losses of PLN 8.36 billion. Therefore, Orlen’s balance sheet in the analyzed period is PLN 2.91 billion in profit.

The company’s loss in 2014 amounted to exactly PLN 5.83 billion. At the time, the company explained that the loss was due to write-downs on the company’s assets. After publishing the graphic with this amount he referred Jacek Krawiec himself, who wrote in the commentary: “Loss, Russian cones, because of your scandalous investments in Mazeikiai, harmful to Poland, which you overpaid several times and almost caused the bankruptcy of Orlen. The analogy to the sale of Lotos to the Arabs is obvious. What you don’t touch it, you destroy it!!!” (original spelling).

It is about an investment in a refinery in Mažeikiai, Lithuania. The refinery was purchased in May 2006, i.e. during the rule of PiS. Even then, experts alarmed that the proposed price was too high. After eight years, in 2014, the Bankier.pl portal informedthat “Orlen wrote off Mazeikiu as a loss”, as it created a write-down reducing the value of Orlen Lietuva by PLN 4.2 billion, and additionally reduced the value of the Czech holding company Unipetrol by PLN 0.7 billion. These moves resulted in a loss of over PLN 5 billion in 2015, although analysts at the time expected a profit of PLN 0.3 billion. Moreover, in 2014 Orlen recorded lower sales revenue than in 2013 due to lower crude oil prices.

Lotos: PLN 0.6 billion profit

According to the graphics on the account of PiS, the president of Grupa Lotos, Paweł Olechnowicz, was to earn almost PLN 7 million in 2008-2015, and the company’s loss in 2014 was to amount to over PLN 1.4 billion.

Paweł Olechnowicz was the President of the Management Board of Grupa Lotos (formerly Rafineria Gdańska) from March 2002 to April 2016. This made him the longest-serving president of a state-owned company in Poland after 1989. Thus, he held his position during nine governments: SLD-UP, PiS, PO-PSL and PiS again. However, the graphic shows only his earnings in 2008-2015, which, according to Lotos’s annual reports, amounted to PLN 8.15 million.

In the same period, from 2008 to 2015, the company recorded profits of PLN 2.8 billion and losses of PLN 2.18 billion. In total, Lotos recorded a profit of PLN 0.62 billion in this period.

The company’s loss in 2014 amounted to exactly PLN 1.47 billion. Paweł Olechnowicz himself explained at that time that this result was influenced by the reduction in crude oil prices (which Orlen also pointed out) and the strengthening of the dollar against the zloty. “This situation entailed, among other things, the need to make a number of write-offs and affected the amount of the company’s debt denominated in the US dollar” – said the president.

Olechnowicz also noted at that time that “the macroeconomic environment, especially in the second half of 2014, was extremely difficult for oil companies.” This can be seen from the losses of Orlen and Lotos, which have been shown in the graphics published by PiS. Comparing these one-year losses of state-owned companies with the long-term earnings of their presidents is, however, manipulation, because all three companies – JSW, Orlen and Lotos – made a profit in the entire analyzed period.

Main photo source: Twitter





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