By Veronika Gulyas

BUDAPEST--A Budapest court Monday found the chairman and chief executive of Hungary's largest company and regional oil company MOL Nyrt. (MOL.BU) not guilty of fraud and misappropriation, a verdict that may make Croatia drop similar accusations against Mr. Hernadi once it becomes binding.

The verdict came in a private case filed against Zsolt Hernadi by one of his former colleagues Ilona Banhegyi, who said he hadn't told shareholders about a bribery case in Croatia.

Ms. Banhegyi, also a shareholder, sued Mr. Hernadi in December saying that case put pressure on share prices.

Since the Croatian government sued Mr. Hernadi on similar grounds, a binding verdict from the Hungarian court would force the country to drop the charges, the CEO's lawyer Peter Zamecsnik told The Wall Street Journal.

Mr. Hernadi and Croatia are embroiled in a bribery case in which, in 2012, former Croatian prime minister Ivo Sanader was convicted of accepting bribes while he was in office to allow MOL to have management rights over Croatian peer INA, according to a Croatian court.

MOL has said the case was politically motivated and denied all the Croatian allegations. The company said Mr. Hernadi has demonstrated to the board's "full satisfaction" why the allegations are unfounded.

Croatia wants to regain control of INA, in which it holds a 44.8% stake following INA's privatization in 2003. MOL owns a 49.1% share of the refinery and its management rights.

Write to Veronika Gulyas at veronika.gulyas@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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