(Podgorica, 29 November 2011) – We doubt that the police and prosecutors are actually prepared to investigate the Nikšić Steelworks case. If they did so properly such investigations would lead them to the former Minister of the Economy, Branko Vujović, who was required to prevent any illegal business dealings by the steel mill’s private owners. Instead he did everything in his power to amnesty them from any responsibility (including within the criminal justice system). A real investigation would seek to establish who stands behind the network of offshore companies to which the Government of Montenegro continuously extended subsidies and guarantees. This network was also notable for doing business with companies associated with the family of the former prime minister, Milo Đukanović.
Former Minister Vujović was responsible for monitoring the implementation of the privatization contract and was informed of the contract’s continuous violation. Vujović also signed a number of supplementary documents that successively reduced the amounts that the owners should invest into the enterprise’s modernization, as well as similar stipulations regarding workers and environmental protection standards.
A protocol signed on 6 July 2009 stated that all parties agreed and guaranteed that they: “will not take any legal action against the other side and that the other party will not be compromised due to previous breaches, incidents of fraud, negligence or any other erroneous action (whether real or alleged) by the other side.” Essentially, Vujović’s signature released the Nikšić Steelworks’ owners of all liabilities.
Early last year, MANS revealed that the Steelworks had established a subsidiary firm, Željezara Nikšić, in Amsterdam. The subsidiary was registered at an address that belongs to the same company that owns the Nikšić Steelworks – MNSS BV. This same Amsterdam address is home to some 154 companies, of which 86 share the same phone number, 26 have the same website and 9 have the same director as the newly registered subsidiary. These companies are headquartered at a residential house in an Amsterdam residential neighborhood.
Since it is common to register companies in offshore locations online, for a few hundred dollars, bundled into such transactions are often the rental of virtual offices and directors in order to help hide their actual ownership structure and cash flow. For these reasons, we asked former minister Vujović to explain what the links were between these firms, what they were being used for and to tell us whether MNSS BV was truly a “strategic partner” of the Nikšić Steelworks or simply a virtual offshore company.
Instead of providing answers, Vujović continued to tolerate a business that eventually drove the Steelworks to bankruptcy. In fact, the government approved additional guarantees for MNSS BV worth tens-of-millions (costs that will now be shouldered by Montenegro’s citizens). Moreover, it appears that MNSS BV was only loaning itself money, that is to the Steelworks it owned, instead of investing in the steel mill’s modernization. These dealings produced debts of 44.5-million with the government’s consent. One of the key issues in the current Nikšić Steelworks bankruptcy proceedings is the return of debts that were possibly inflated by networks of related companies.
One of the protocols signed by Vujović allowed MNSS BV to transfer money earmarked for investments in the steel mill onto an account of the First Bank of Montenegro (Prva Banka), which had previously approved some loans for them.
It is also known that the owner’s of the steel mill, instead of producing final products for the market, would sell semi-processed goods to a private company operating on premises owned by the Nikšić Steelworks. That private company is in several ways linked to the family of former Prime Minister Djukanović. We were never able to establish whether the government also approved such an arrangement.
On 24 April 2010, MANS filed a criminal complaint with Supreme State Prosecutor indicating the possibility that the Steelworks’ subsidiary and the network of linked offshore firms might have been used to launder money and to subsequently extract funds from Montenegro. We underlined Minister Vujović’s responsibility in this matter and the need to establish his motives and potential bosses in the matter.
In the criminal complaint that MANS filed, the State Prosecutor’s office was provided with hundreds of pages of documentation on the registration of firms at the aforementioned Amsterdam address, financial statements, documents relating to the privatization and other information. On the same day, the prosecution returned the entirety of the documentation along with a request that we translate the evidence into the official language.
While we were fulfilling this absurd request, we sent the State Prosecutor’s office articles that provided details about the case. Nevertheless, Supreme State Prosecutor Ranka Čarapić told MPs that the documentation had never been delivered.
MANS contacted the President of Montenegro’s Parliament, Ranko Krivokapić, to present him with footage of Čarapić’s statement as well as a copy of communications that contained the seal of the Supreme State Prosecutor’s office. While such evidence clearly indicates that Čarapić was speaking untruths in Parliament, no response was forthcoming.
Instead of government institutions addressing the questionable business dealings of MNSS BV and the Nikšić Steelworks, they not only tolerated this behavior but assisted in mounting legal actions against those pointing out possible criminal actions. The only concrete answers that we received as a result of our efforts were two trials, one criminal and one civil, that were launched by MNSS BV against MANS (both of which they lost).
Therefore it is absurd to expect that the current investigation at the Steelworks will actually establish the facts concerning the responsibility of all those involved. Since April 2010 to the present, not a single institution has moved to do anything concrete in this case.
