ICN Files Suit Over Subsidiary’s Seizure

ICN Pharmaceuticals Inc., whose chairman and founder is a bitter political foe of Yugoslav President Slobodan Milosevic, said Wednesday that it has filed a $500-million lawsuit against the Yugoslav and Serb governments over the takeover of an ICN subsidiary.

The U.S. government has already condemned the Belgrade government’s takeover of ICN Yugoslavia, the largest pharmaceutical company in that country. Costa Mesa-based ICN says it has a 75% stake in ICN Yugoslavia.

U.S. State Department spokesman James Rubin said the takeover was an attempt by Milosevic to silence opponents, including Milan Panic, the Serbian-American chief of ICN Pharmaceuticals who once served as Yugoslavia’s prime minister.

The State Department also charged that Milosevic’s government engineered the takeover to avoid paying more than $175 million owed to ICN Yugoslavia for medicines provided to the state-run health-care system.

“What happened over the weekend was theft, pure and simple,� ICN lawyer Arnold Burns told a news conference in Washington.

ICN filed suit in U.S. District Court in Washington under terms of the Foreign Sovereign Immunity Act, which regulates private claims of U.S. businesses against foreign governments.

If the pharmaceuticals maker prevails, the act--supported by an international treaty that Yugoslavia has signed--would permit ICN to seize assets of the Yugoslavian government that are being held in the U.S.

David Watt, ICN’s chief legal officer, said various Yugoslavian assets--including cash banking accounts, securities and gold bullion--have been frozen in the U.S. since the Bush administration imposed sanctions of the Balkan nation in 1992.

ICN’s suit alleges that the Belgrade government engineered the illegal transfer last year of the majority of ICN’s ownership interest in the Yugoslavian company to the State Health Fund of Serbia. It alleges that armed police and paramilitary troops took over the ICN Yugoslavia headquarters near Belgrade on Feb. 6 and forcibly removed managers from their offices.