POLISH INSURANCE;LARGE IRREGULARITIES, EMBARRASSMENT TO MANAGEMENT

Polish News Bulletin, Warsaw, Poland, Sunday, Nov 05, 2006

WARSAW - One of the flagship projects initiated by former PZU CEO Cezary
Stypulkowski - foreign expansion - is a serious problem for the current top
brass at the insurer.

Recently PZU Lietuva, the insurance company's Lithuanian subsidiary, had to
be capitalised with ZL35m. It looks like a similar operation will be
necessary in the case of PZU's Ukrainian companies, PZU Ukraine and PZU
Ukraine Life.

According to Puls Biznesu, the scale of irregularities in PZU's Ukrainian
firms is so large that dismissals among the top officials in them will
follow.

A person who read a classified report on the condition of PZU's Ukrainian
assets told Puls Biznesu that it is an embarrassment to its management and
supervisory board (both entities have the same top guns).

Information on PZU's foreign investments is to be presented at the insurer's
extraordinary meeting of shareholders on Friday.

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