By Veronika Gulyas

BUDAPEST--The Budapest Municipal Court declined the request of the Croatian State Prosecutor's Office for the extradition of Hungarian oil and gas firm MOL Nyrt. (MOL.BU) Chairman and Chief Executive Officer Zsolt Hernadi, MOL said in a stock exchange filing Monday.

The Croatian authority issued a European arrest warrant against Mr. Hernadi last week in relation to the bribery case of Ivo Sanader, the former prime minister of Croatia. MOL holds a controlling 49.1% stake in Croatian oil firm INA d.d. (INA.ZG). Croatia has a 44.8% stake in INA.

"The Budapest court, in a final and non-appealable decision, declined to fulfil the request because in the criminal case forming the basis of the request namely, bribery in international relations, a criminal investigation had already been conducted in Hungary with the conclusion that Mr. Hernadi didn't commit the crime he has been charged with by the Croatian Prosecutor," the filing said.

Hungary's Prime Minister Viktor Orban, in a radio interview Friday, said MOL should sell its stake in INA to Croatia, saying this business row isn't worth as much as friendship between the two countries. The Hungarian government has 25% stake in MOL.

Analysts have repeatedly said MOL shouldn't sell INA because its investments haven't returned yet. Concorde analyst Attila Vago said the fact that Hungary's government is having a say in MOL's strategic issues was "very worrisome, dispiriting and preposterous."

MOL closed down 0.7% or HUF100 at HUF15,350.

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