Traders in darkness
EFT of Vuk Hamović begins a new phase of business operation – and will continue to be the main supplier of EPCG with imported energy, but it will also be its direct competitor on the internal market. This opens up limitless space for manipulations.
Along with Serbia, Bosnia and Herzegovina and Albania, Montenegro is a part of the «Bermuda rectangle» in which ETF earned its first one hundred million. All this along with a number of unknown facts and controversies
Energy Financing Team (EFT) from Herceg Novi, member of the holding bearing the same name with a seat in London, is the first private company that obtained from the Montenegrin Energy Regulatory Agency (ERA) the licence for trade in electric energy. This practically means that EFT is in a position to offer, equally with EPCG, supply of electric energy to all the consumers in Montenegro except the category of households. They will obtain the right to choose an electric energy supplier in 2015.
Thus, historians will note, liberalisation of the energy market in Montenegro began on December 23 2009. Yet, the founders and owners of EFT are not too euforic about the possibility that they and their company could find a place in economic readers. They have other priorities.
Market liberalisation will only apparently lead to equal competition. As opposed to EPCG, which must secure supply of all the consumers, EFT can choose who to deliver electricity to. It is to be expected that this will be big consumers who are regular payers, which can exhaust the system of EPCG in financial terms and make the national company lose value.
«Glory to others – money to me». This is how, several years ago, Vuk Hamović, one of the founders of EFT, explained to journalists in Sarajevo his business philosophy. There is no euphoria among the consumers either. Maybe also because we have all been consuming the electricity supplied by ETF for ten yers already. It is only that, to date, we paid the bills to it with the mediation of Elektroprivreda (Power Supply Company).
Sparks even without electricity
Hamović and Lazarević were accused in Serbia for suspicious recapitalization of the National Savings Bank with the assistance of Minister Mlađan Dinkić and his collaborators. The National Savings Bank in which the heros of this story controlled 54.2 percent of capital was sold to Greek EFG Bank. It is reckoned that Hamović and Lazarević obtained 41 million Euros, ten times more than they invested into this business.
Problems, but of international character, are caused by the business operation of Euroaksis from Moscow, former Veksim bank, whose co-owners are Hamović (who left it in the meantime) and Lazarević. At the time when Dinkić was a Governor, the National Bank of Serbia also kept a part of its deposits there, while Euroaksis has been continuously accompanied by affairs since 2000. Allegedly, at the beginning of 2008 its business operation was investigaged also by the Russian Federal Security Service.
According to the writings of the Albanian daily Shekuli, Lazarević’s business doing is the subject of long year analysis and monitoring of German and American security services due to alleged involvement into business with transport of materials used for programmes of nuclear armament in Libya and Iran. The Albanian daily bases such statements on the documents of reputable American organisation NTI, which deals with the issue of nuclear proliferation. According to the information held by this organisation, Lazarević’s Rudnap export – import was registered by the radars of CIA and German BND during 90s, when Libya tried to procure from the structures close to Milošević’s regime in Serbia spare parts and technical support for the construction of the rocket system SS-21. Confirmation was obtained in April 1993, when Ukrainian authorities confiscated a shipment of 80 tons of ammonium-percolate, which is used as rocket fuel. It was precisely Rudnap that took over the shipment in Ukraine.
The article in Shekuli was written after an unprecedented affair with the electricity buy-off. Namely, in Febrary 2007, Albanian Government announced that Rudnap, till then a company utterly unknown on the market, will supply with 50 MW Power Supply Company of Albania (KESH). It turned out that the agreement was reached after one of private meetings of the Albanian Prime Minister Sali Berisha with Vojin Lazarević in Moscow.
In Montenegro Lazarević is accompanied by the story on an attempt to sell Jugopetrol from Kotor to Luk Oil without a tender. At the same time, he is one of the actors of the affair Timor: an attempt of Vujanović’s government to take a loan of 30 million dollars with a company that does not exist, and many thought that someone would launder money through that arrangement.
In February 2002, assailants that remained unknown to date fired at Lazarević while he was entering his building in the Belgrade settlement Senjak. Some time earlier, according to the testimonies of residents, his car was «blown up» on the parking in front of the same building ”.
FROM MONEY TO REPUTATION: To be a consumer of electricity supplied by EFT is not a matter of great exclusivity today. Millions of consumers in around fifteen European countries are doing this now. From Germany, Austria and italy, via Hungary, Greece and Slovenia, all the way to B&H, Serbia, Albania and Montenegro, EFT bought and sold 17 billion kilowatt-hours this year (approximately five year long production of EPCG) and realized a sale of one billion Euros.
It was not like this several years ago. Montenegro, along with Serbia , Bosnia and Herzegovina and Albania was a part of «Bermuda quadrangle» in which this company made its first hundred millions. With a lot of unknown facts and controversies.
The story on cooperation of EFT and Montenegrin Elektroprivreda started by the end of last century, when Vuk Hamović and Vojin Lazarević joined money and connections.
On one side: son of a national hero and Chief of the General Staff of the Yugoslav National Army, sixty year old Hamović went to London after sanctions were imposed against FRY. There, in GLM International, he built a career of a businessman specialized for trade in (risky) debts of Governments and companies from the transition countries of South East Europe. Prior to this, since 1987, when he left his position in Energoinvest, he gained experience in joint companies he founded with Zoran Drakulić (Ist Point) and Milošević’s mininster for privatisation Milan Beko (Yu Trust). At the same time he earned the reputation of a significant financier of Serbian opposition, primarily the Democratic Party.
There are also those (engineer Boža Bogdanović from Bor) who claim that before founding EFT, Hamović cooperated also with the controversial Swiss company Glencor founded by even more controversial businessman Marc Rich. Others, however, (www.biznis.ba – file everything about Vuk Hamović, Vojin Lazarević…) say that in his desire to make profit Hamović did not hesitate to engage officials of competitive companies in order to work for him in secrecy. This is illustrated by the example of Goran Novaković who was dismissed precisely by Glencor after doubts that he was working for Hamović. After that, in 2001, on recommendations of Hamović, Novaković was engaged in the Government of Serbia as an expert for energy.
On the other side – Vojin Lazarević (49) from Kotor, whose ancestros were renowned seafarers, physicians, deputies in the Assembly of the Kingdom of Yugoslavia, lawyers… He was running a family law firm at the time of disintegration of SFRY, to become aware soon of the possibilities that engagement in the business and politics of that time offered. So he tried himself in parallel on both side. Then he registered the company Pima and became the financer and deputy of the National Party.
Judging by the memories of the then President of the NP Novak Kilibarda, the cooperation was mutually beneficial: “I procured to him a diplomatic passport… Vojin was a republican and federal deputy of the NP, I wanted his position in the party to be analogous to his business and pedigree.” Kilibarda remembers: “It was only once that Vojin abused me. We were flying from Tivat airport to Belgrade, he became somehow flurried, couldn’t sit in one place, we were approaching the control point, Vojin knew I would not be searched so he gave me two quite thick envelopes, I hardly put them into my pocket. I did not ask what was in them, I saw he was relieved when we entered the plane”.
It was afterwards that Kilibarda realized what it was about so, at the time of campaign against PP Buk Bijela for whose construction EFT was interested, he stated: “I must say that Lazarević is a great master for vague dealings and money laundering in great amounts”. At the same time (summer 2004) the daily Dan reports that Prime Minister Milo Đukanović and Vuk Hamović discussed the destiny of that project in the monastery Tvrdoš.
Under public pressure, the plans for flooding of Tara failed to the ground. EFT has been mentioned since then as a possible concessionary of power plants on Morača whose construction the Government is intensively preparing. Someone would thus obtain electricity to sell, someone an opportunity to employ construction mechanization, so an agreement is still possible. On the condition that calculations are not spoilt by A2A, i.e. by some promise given to the Italians during the recent process of recapitalization of EPCG, or that Hamović, as in the case of purchase of EPCG, notwithstanding the resonant announcements, does not give up the participation on the tender without explanation.
ONE’S OWN MASTER: However, the period from 1998 to 2001 is more important for this story. That is when Lazarević was engaged in the Government of Filip Vujanović, first as a minister without portfolio and then as an economic advisor, while he represented the state interests also as a member of the board of Jugopetrol from Kotor and the President of the Shareholders Assembly of EPCG. Lazarević resigned from the position of the Prime Minister’s advisor on December 31 2000, when the National Party exited the coallition with DPS and SDP, but he remained the President of the Assembly of Elektroprivreda until spring next year, i.e. until the contract on purchase of electricity was signed with the newly established London company EFT, in which he was a Director and a joint-owner.
The fact that Lazarević, practically, agreed with himself the business through which the biggest state company from Montenegro was to buy electricity produced in the neighbouring B&H (Republic of Srpska) over his company from London, attracted the attention of everyone – except for those who “by official duty” had to pay attention to it. The officials remained silent. With the exception of those rare ones who, in various ways, tried to justify this arrangement.
The explanation of the assistant to the Director of EPCG for economic issues Đorđe Milić lived longest. He explained by the end of 2001 that electricity is bought in this way because EPCG has no money or bank guarantees, so it had to find an intermediary ready to risk delays of two to three months. An almost identical story was offered by the officials of EPS some years later in response to the accusations that they caused damage to the state through deals with EFT: On a tender for import of 1.59 billion kilowatts for the needs of EPS, financed by USA, the offer of Hamović was assessed as the most favourable even though it was by 650.000 dollars more expensive than that of the German RWE.
“If there were any doubts of irregularity of electric energy import over EFT, the international community would not finance that”, Lazarević defended himself .
It was precisely with these words that Lazarević contested his own defense and that of EPCG management – and showed that statements that the national company has no money or bank guarantees are used as an excuse for EFT to obtain the deal. In spring 2003 we found out that USAID supported Montenegro with 11 million dollars intended for financing import of electricity from Elektroprivreda of the Republic of Srpska (EP RS) between 1999 and 2001. It is precisely this money, guaranteed by the Government of USA, that ended up on the accounts of EFT.
We bring a brief description of that business from the website of the Centre for Investigative Reporting (CIR) from Sarajevo: Hamović over GML makes an agreement with EP RS and in summer 1999 starts buying off its debt claims from EP CG. By way of example, in August of that year, GML paid 2.27 million dollars to suppliers of EP RS, which were to be compensated from the same value of debt of EP CG.
At that time the American Government was providing financial support to Montenegro and that information was well known to the public. However, what the public did not know was that a part of that support, more precisely 11.9 million dollars, was intended for paying the debt for electric energy bought from EP RS.
Only a few weeks after the mentioned exchange of debts, or more precisely on August 30 1999, USAID paid the first installment into the account of EP RS amounting to 3.7 million dollars. Seven days later EP CG addressed in writing EP RS and stated that EP CG does not owe anything to EP RS and that the money should be redirected to the accounts of GML and several other creditors.
This model, according to which GML was to buy debts before USAID’s money became payable, was repeated during 1999 and 2000. As the e-mail that CIR received from the spokesman of EFT Nenad Savić says, in all these transactions GML earned money buying debts with a 30 percent discount. “
CHECKS AND (OR) AMNESTIES: In Februaray 2003, High Representative for B&H Paddy Ashdown replaced the President of the Management Board of Elektroprivreda RS Boško Lemez and the General Director Svetozar Aćimović due to embezzlements worth millions. They were replaced after the report of the special auditor of OHR was published, which suggested that EFT, «due to corruption and payment of bribe ”, enjoys a privileged position in the trade in electric energy with Elektroprivreda RS. The investigation continued until April 2006 when it was stated that the indictment would not be issued.
EFT stated on that occasion that the case was rejected for lack of proofs. Jonathan Ratel, the prosecutor who conducted this case said it was dismissed because at that time the prosecution did not have enough money: “That is the real reason. The special department had a chronic lack of funds. They lacked experienced prosecutors. We did not have the money to engage an accounting expert witness to conduct an investigation on this case. It was not a lack of proofs “, said Ratel for www.cin.ba.
Destiny of the assistance that USAID intended for Montenegro was also the subject of investigation of the Serious Fraud Office of Great Britain. According to unofficial findings of podlupom.info, within that investigation it was asked from the officials in Podgorica to check and explain the purpose of payments that arrived from EFT to foreign accounts of one of the ministers from the then Government of Montenegro. They remained without an anwer. The management of EFT appointed Robert Gelbard, former special advisor to the President of USA Bill Clinton, as their representative. And in mid 2008, after the new boss arrived, the Fraud Office decided to withdraw charges against EFT.
“We rejected the case due to the legal advice in which it was stated that there is little prospect for succssesful completion of the court process “, stated the spokesman of SFO Sam Jaffa.
There are more interesting details in the business operations of EFT. Thus, it turned out that only 12 days after its establishment (13 October 2000) EFT bought off all the winter surplusses of EP RS until the end of February of the following year. Elektroprivreda of Serbia did not react event though it was a long time buyer and user of surplusses of EP RS. That is why they bought electricity from EFT that winter, and record restrictions of electricity were recorded in Serbia. Most people from the then management of EP Serbia worked or still today work in the Belgrade Rudnap Group of Vojin Lazarević.
The Assembly of Serbia established a fact-finding board in March 2004, which was to investigate work of EPS and charges that the management of that company “concluded detrimental contracts with EFT and thus caused damage to the state, EPS and the consumers that amount to millions of Euros”. Even though the parliament never gave a statement on their recommendations, the, fact-finding board with the assistance of witnesses gave precious testimonies on cooperation of EFT and the state power supply companies from the region.
Thus former Serbian Deputy Minister of Energy Nikola Nikolić stated that EPS “turned into a service of one trader in electricity”. He explained that EPS, beyond the market logic took over electricity from EFT even in summer, with the obligation that it will return it in winter period, when it faces anyhow the shortage of electric energy. “Still, the culmination is that electricity was taken over when a kilowatt cost 2.4 cents, and returned when the price was 4 cents, with the obligation of EPS to return to EFT 1.14 kilowatts for each kilowatt. That is crime ” – said Nikolić quoting examples when EPS bought electricity from EFT, extinguishing at the same time its thermal power plants and discharging surpluss waters from the overfull accumulations of HPP Bajina Bašta. Nikolić also quoted the fact that EFT bought masout from Oil Industry of Serbia at the price of 122 dollars per ton, while at the same time EPS paid a ton of masout 196 dollars.
A similar topic was never on the agenda in Montenegro, even though year after year the arrangements with EFT became greater and more expensive. With the exception of Slobodan Daković, the Executive Director of EPCG who at the time of the first contract with EFT gave in his dismissal (due to electricity outages), all official and unofficial actors of this business still occupy their previous positions or advanced in the state service. The electricity price which EFT supplied advanced (rose) too: from 25.5 Euros per megawatt (2001), over 30.9 in the following year, 67 in 2007, to the record 2008 when Hamović’s EFT offered electricity at the price of 87 Euros per megawatt. After EPCG refused that offer and repeated the tender, EFT reduced the price and ranked first again. Today from that company they explain that the reduction was the result of global economic crisis and not of the fact that EFT offered electricity at a much higher price than the purchasing price so it had room for a discount.
It should be mentioned – Lazarević sold his share in EFT and left the company in 2005, since when he has traded in electricity over the Rudnap Group. This roughly overlaps with the time when local power supply companies instead of direct deals started purchasing electricity by means of public tenders. Still, owing to the acquired market positions, Hamović and Lazarević remained the main suppliers of EPCG to which, depending on the year, they deliver up to 85 percent of needed imported electricity.
Now EFT will be in a position to offer supply of electric energy directly to big consumers. „The plan of EFT is simple, we will try to win over as many consumers as possible in Montenegro “, said Gordan Stojović, Director of the local affiliation of EFT.
The problem may be the EFT will supply with electricity Elektroprivreda too, which means it will dictate the price not only to its own consumers but also to the only competitor on the market. And this opens up the opportunity for new, big and small, monopolies and extra profits.
