(Podgorica, 3 July 2013) – Due to the illegal issuing of state guarantees for KAP credits, which has already resulted in damaging consequences for Montenegro’s budget, MANS submitted today to the Supreme State Prosecutor criminal charges against several government officials, including the current and former prime ministers Milo Djukanovic and Igor Luksic.
The charges also apply to the president of the Commission for the Control of State Aid, Mitar Bajceta, the former Minister of Economy, Branko Vujovic, the former director of the Fund for Pension and Disability INsurance and the current Minister of Finance, Radoje Zugiv, the former director of the Employment Bureau, Zoran Jelic, and Branislav Jankovic, an official with the Development Fund.
They are accused of abusing power for an extended period by adopting a series of decisions that resulted in the issuing of state guarantees for KAP credits totalling some €131.6-million. The activation of these guarantees has done serious damage to the state budget, which is only a part of what will be paid from the citizens’ pockets in order to settle the debts made by KAP’s owners.
When we consider that this sum does not include taxes or expenses of approved guarantees, it is then clear that the scope of the government’s catastrophic policy towards KAP are incomparably greater. It is clear to everyone today that the financial system of the state has come under threat due to Djukanovic’s business deals with Russian oligarch Oleg Deripaska.
Recall that Djukanovic’s government made its first damaging decision back in 2005, when the most significant enterprise in the country was sold to an offshore firm registered in Cyprus, which possessed only €1,700 in capital (a fact that the public found out only years later).
Djukanovic and his government new that for year the Russians were exporting the profits from processing aluminum outside the country, instead of investing in the KAP’s modernization. They also know about the falsified financial statements and the false statements of business performance in order to secure the continuation of electricity subsidies and to halve the number of workers.
In spite of all of the above, in 2009 the Government illegally and against economic logic concluded a Settlement Agreement that approved €300-million in state aid to the Russian owners, including €131.6-million in state guarantees.
To this day no one knows what the loans were used for and where this money ended up, which the Russian owner borrowed from related companies, while the State Auditing Agency noted that the state guarantees weren’t covered by counter-guarantees.
In the end, the issuing of guarantees worth hundreds of millions of euros in state assistance to one Russian tycoon represents a naked betrayal of state interests, which would in any developed society lead not only to determining criminal, but also political accountability.
MANS is asking that the Supreme State Prosecutor initiate an immediate investigation due to a series of abuses by Government officials in the country’s “strategic partnership” with the Russian owners. As a result of these decisions, following the activation of state guarantees, the impact on salaries, pensions, social assistance, as well as a series of tax impositions on citizens (including the recent VAT hike).
