This study shows one of many examples of harmful privatizations in Montenegro, where the state sold valuable assets for a low price to controversial investor, who did not fulfill his obligations. Instead of canceling the privatization contract, the government gave the investor a new deadline for implementation of the planned investment.
Furthermore, the study shows that the buyer did not respect the latest deadlines and also violated minority shareholders’ rights. It also shows the profile of the controversial investor, including descriptions of attractive locations, which he has acquired on the Montenegrin coast in the last decade.
The company “AD Jadran Perast” was founded in 1924 in Tivat as a small workshop producing garments. It moved its headquarters to Perast ten years later. During nineties this company employed around 800 workers, while in 1995 it was transformed into a joint stock company. Then, the ownership of the shares was transferred to workers and state funds. Two years later the company entered into bankruptcy, while in the same year its core business changed into tourism.
One of the most valuable facilities that the company had in its possession is the attractive palace “Smekja”, which was built in the 18th century and is a valuable cultural and historical monument, with an area of 2,500 square meters, as well as the hall of the same surface, which was once an industrial plant.
Privatization plan for 2000 included “AD Jadran Perast” on the list of transformed enterprises in bankruptcy, for which several models of privatization were proposed: sale of assets, segmentation or joint venture.[1] Value of the so-called shareholder’s capital was estimated at 11.8 million Deutsche marks. Two years later, the Privatization plan shows that company’s shares were not registered within the Central Depository Agency, whereby 34.5 percent of the capital was privately owned, while 65.5 percent of the capital owned by the state was intended for sale.
Since in the meantime Euro became the official currency in Montenegro, the value of equity of “AD Jadran Perast” presented by the Development Fund was just over six million, as mentioned in the Statute of the company for 2003.
Complete case study you may donwload HERE (PDF)
