Are there any privileged companies and businessmen in Montenegro? Those exempt from taxes and contributions, duties, excises, those who do not have to respect the laws and contracts, companies that are not obliged to operate in line with court decisions … The examples are the Aluminum Plant, the Coal Mine in Pljevlja, the Steel Mill in Nikšić, the Port of Bar, First Bank … they are the proof that the “state interest” is often more important than the law, justice and economic logics.
But in the shadow of big “strategic” companies whose privileges and subsidies can be at least a formally justified, there is a number of private companies whose owners have the same or even bigger privileges and there is no formal explanation for this … unless we take as a valid explanation the fact that these are the people who are in friendly/best men-godfather relations with the state officials.
FACE AND ITS REVERSE: It is a public secret that almost all representatives of Montenegrin political establishment have their own “shadows” among the successful entrepreneurs. Someone claims, while the others are still wondering: aren’t they here to use power and influence of their relatives and business partners in the state establishment to make money by using all the privileges they have – from the inside information to the state treasury money?
Last week the Commercial Court in Podgorica rejected the request to adjudicate the company Vektra Montenegro owned by Dragan Brković bankrupt. The request of Fagar Montenegro from Cetinje was rejected for procedural reasons even though according to the payment operations data the Vektra’s creditors were requiring enforced collection amounting to EUR 4.66 mill.
Attention was particularly drawn by the data that on the top of the list of creditors who are hopelessly trying to collect money from Vektra is the Customs Administration with claims of EUR 2.23 mill. At first sight – this news seems to be impossible.
The system of operations of the Customs Administration is such that you simply cannot owe them. In order to take over your goods from the customs storage Montenegrin entrepreneurs must give Montenegrin customs officials a proof that they have paid all their financial duties to the state. Very often this is not enough, and entrepreneurs first need to pay money to the relevant account. However, there are exceptions to this rule.
According to the information provided by www.podlupom.info the company Vektra owned by Dragan Brković is among the companies which were not allowed to use the so called “customs credit” as ordered by the Deputy Prime Minister and Minister of Finances Igor Lukšić. In layman terms this means that the company has a privilege to take over their imported goods without paying excise and customs duties – “on credit”. The problems started when Vektra failed to pay their debt after the “grace period”, approved by Minister Lukšić, had expired.
The public did not have a chance by now to get acquainted to the reasons which encouraged the Government to release Vektra – temporarily or permanently – from paying fees and duties which make the basic budgetary revenues. This information would help us understand whether the fact that the employees of Vektra Boka from Herceg Novi and Vektra Jakic from Pljevlja have not received salary for months speaks in favor or against the status of Vektra before the Government of Montenegro. Dragan Brković is even more delayed with paying taxes and contributions to salaries of Vektra’s daughter companies’ employees. And just for the sake of refreshing our memory we should mention here that the previously mentioned companies became a pat of Vektra through the process of privatization. This means that Vektra Montenegro as a buyer has undertaken precisely defined duties it is obliged to fulfill them as a new owner. But it didn’t and it doesn’t. Instead we have a story about bankruptcy, garnished with the decision of the authorized ministry to release the company which is already not paying taxes and contributions, from paying customs duties.
However nobody even dares to think that the Ministry of Finance has “out-lawed” from the Government and is independently making moves that favor Brković’s Vektra. On the contrary. One of rare principles that all Montenegrin governments has stick to in the last 20 years is that Vektra is always right, even when it is pushing the Aluminum Plant into the “debtor slavery” sucking out its capital, even when it is selling the illegally built facility at the Vektra Square (Trg Vektre) to – the Government, even when it is selling the leaking facility to the state at the price of residential objects in the center of London or Rome…
Finally – the current stories about the (im)possible adjudication of bankruptcy in Vektra Montenegro would not exist without their business arrangement in Pljevlja. In the package with Vektra Jakić, Brković got a concession based on which he is entitled to a 30-year right to exploit forest resources in municipality of Pljevlja. The Ministry of Agriculture headed by Milutin Simović and Forest Management Administration have signed the contract with Vektra even though their rival, the consortium of domestic processors, had offered 20 million euros more.
According to that Contract, signed at the beginning of 2007, Vektra is obliged to cut about 140 thousand cubic meters of wood per year and to pay for that, as a concession fee, about more than 1.6 million euros per year. Three years in a row the company has not fulfilled its contractual duties. Only last year the state and the municipality of Pljevlja were damaged for the amount of 1 million euros of the foreseen revenues. None of the authorized bodies has questioned this arrangement even though the Law on Concessions requires termination of the contract with the concessionary which do not fulfill his contractual duties.
Why is Dragan Brković privileged?
LIKE SHIP IN A BOTTLE: There are similar examples in the south of Montenegro. There is no need to repeat the stories about Avala and the hill of Zavala which are quite well known to all the citizens of Montenegro except to those who are heading Montenegrin prosecution. Here is another case less exposed in the media.
Despite the decision of the Appellate Court from 2007 the company Pomorski saobraćaj (“Sea Traffic”)does not submit to the public company the Coastal Zone Management Agency (JP Morsko dobro) data on its operations and thus the public company which is managing Montenegrin coast is forced to determined the amount of the concession fee for the company owned by the brothers Duško and Dejan Ban “approximately”. This data was disclosed in October last year by the officials of the State Audit Institution after auditing the Coastal Zone Management Agency (JP Morsko dobro), while they “expressed reserve” in regard to the amount charged from the company Pomorski saobraćaj. In layman terms this means that the auditors had doubts about whether the Coastal Zone Management Agency is charging the full amount for the agreed concession, which in more simple language means that the money instead of going to the state budget is actually staying in private pockets.
Duško Ban is known to Montenegrin and the public in the region from the so called “tobacco affair”, when it turned out that he was one of those who were running the company Mia, through which it owner Stanko Subotić was “transiting” cigarettes. Ban then became a majority owner of the company Pomorski saobraćaj by purchasing shares of that company at the stock market from the state funds which were by the decision of the Privatization Council obliged to privatize one of just a few profitable state companies without a public tender.
The Sales Contract was signed in 2004. The Company Pomorski saobraćaj is obiged by the end of 2018 to allocate 4% of its total income (charging ferry carriage Kamenari – Lepetani) to pay the concession fee for exploitation of the coast. They are however ignoring that obligation even after the decision of the Appellate Court and not even the management of the Coastal Zone Management Agency, according to the finding of the state auditors, is expressing any more interest to collect the state revenue.
Why is Duško Ban privileged?
BRICK BY BRICK: The company Čelebić from Podgorica, owned by Tomislav Čelebić, in 2001 began building of a residential-business building in the part of Podgorica called Stari aerodrom which was two floors taller than allowed by the construction permit. By modifications and amendments to the Detailed Urban Plan Konik – Stari aerodrom the Local Parliament of Podgorica legalized illegal construction in July 2006. The same thing happened with the residential-business building Čelebić built between the Basic Court and the Security Center in Podgorica. It also has two “extra” floors which were legalized by the decision of the Local Parliament of Podgorica in 2007.
The authorized bodies issued to Čelebić a building permit to build four-storey buildings in Zagorič (part of Podgorica) even though the valid DUP foresees that only two-storey houses can be built in that area.
The building was later fit into the plan through modifications of DUP Zagorič 1. The company, as a contractor started construction of Delta City without a provided building permit. Construction of the University Donja Gorica facility started in the same way; it should be mentioned here that Tomislav Čelebić is one of its founders along with the Prime Minister Milo Đukanović and professors Veselin Vukotić and Dragan Vukčević. In this case as well all legal problems were resolved “in the meantime” without any consequences to the investors and contractors.
About the same time, the public has learnt that the company Čelebić got a job, without a tender, to build a new police building in Podgorica. The job was 13 million euros worth. It was revealed later that Čelebić signed another contract within that very job according to which he becomes the owner of the plot where the Security Center Podgorica facility is standing now. This property was sold for a much lower price than the official market price. The former state prosecutor Vesna Medenica ordered the annulment of the disputable contract, but its authors did not bear any consequences. The plot was, in the meantime, bought from Ministry of the Interior by Aco Đukanović, brother of the Prime Minister
Why is Tomislav Čelebić privileged?
LONGER THAN ETERNITY: Almost 15 thousand shareholders of Eurofond have been waiting for eight months for the Commission for Securities to establish whether they were damaged in the last year trade conducted by the managers of Euroinvest, the association which has been managing Eurofond as of its establishment. Suspicious affairs started in June last year immediately after the Eurofond got about 40 million euros by selling together with four more Montenegrin privatization funds its shares in EPCG to the Italian A2A.
Part of that money was invested in shares of HTP Mimoza in the following way: Euroinvest where the businessman Veselin Barović is a member of the Board of Directors – famous for his participation in tobacco business and threats to the staff of the casino Maestral – decided that Eurofond in which Veselin Barović is one of the biggest shareholders, will buy for EUR 320 thousand about 0.6 percent of shares of the company Mimoza controlled by Veselin Barović from the company Komersa owned by Veselin Barović. The shares were paid in block trade at price of EUR 15.9 that was four times higher than their stock price at the time. And one more thing – these were the first shares that Eurofond bought in HTP Mimoza.
Then the managers of Eurofund made another stock exchange stunt: with the money they earned by selling EPCG shares at EUR 7.1 diminished by 30-40 cents for the brokerage and intermediary commission, they bought again EPCG shares at the price greater than the value of shares listed at stock exchange. Instead of paying 44 thousand shares between 5.8 and 6.1 euros the Eurofond bought them for 7 euros, which is more expensive than they sold it couple of days before.
The Eurofund spent almost EUR 22mill last year on similar activities. According to the Law on Investment Funds “a management company and related persons may not sell their assets to the investment fund…”. However KHOV was not able to make a decision eight months about (il)legality of these transactions.
Why is Veselin Barović privileged?
At the time when the local businessmen believed that they can reach skies in 2007when the money invested in real estate and shares started multiplying “over night”, the Prime Minister Milo Đukanović at his interview for the TV Montena said that “among those who made a lot of money there were my friends too”. The Prime Minister also admitted that “no one who was doing business in 1990s in Montenegro could not have avoided knowing me because I was Prime Minister at the time”, but he also pointed out that according to what he knows none of his friends misused his friendship and his position to make fortune.
And there is one more question – why could none of the people who did business in Montenegro “avoid” knowing the Prime Minister? Why is it wide known that Dragan Brković, brothers Ban and Veselin Barović are close friendly that is best men/godfather relations with Milo Đukanović? Tomislav Čelebić is his business partner. Should we then be surprised to know that this group of people was privileged to work and earn money even when their engagement were just about to cross the line or on the other side of the law? The unwritten Montenegrin rule says: if you are in power, others get a bit of your power too. If you have any doubts, check what Aco Đukanović, Vuk Rajković, Goran Sito Rakočević or Zoran Bećirović have got to say about it.
