Officials assume that the scheme cost the Croatian Government up to $150 million.
According to local reports, amongst the 12 arrested are former president of Uljanik Gianni Rossanda and his predecessor Anton Brajkovic, suspected of causing more than HRK1.2bn ($182m) of financial damages to the company.
The yard has been affected by a financial crisis by July 2018. The shipyard has experienced the termination of numerous ship construction contracts. In the meantime, its employees have been on strike because of unpaid wages.
The previous week, Croatia's ruling coalition didn't decide whether the shipyard has to enter restructuring or file for bankruptcy.
Last year, Croatian shipyard Brodosplit in partnership with Italy’s Fincantieri Group, submitted their interest to take over Uljanik.