Today, the Network for Affirmation of NGO Sector (MANS) filed a criminal complaint against Montenegrin President Milo Đukanović, the vice-president of the Parliament, Branimir Gvozdenović and several others for suspicion of abuse of office, in order to gain illegal profit and power in privatization process of the Electric Power Company of Montenegro (EPCG).
Đukanović and Gvozdenović (Photo by: Boris Pejović)
The criminal complaint also included Dušanka Jeknić, Damir Asović, Veselin Barović as well as Edward Petre-Mears and Sarah Louise Petre – Mears from the offshore company River Financial Trading Limited.
The complaint states that they formed a criminal organization with the aim of committing serious crimes for which a prison sentence of more than four years may be imposed, in order to obtain unlawful gain and power.
“In doing so, each of the reported persons had a predetermined task and role, by planning action over a longer period of time or for an unlimited period of time, planning and operating internationally as well, using the economic and business structures, and using the influence on the executive power, during the tender procedure of the EPCG privatisation procedure, they extended the deadline and conditions of the tender, then favoured the Italian company A2A and enabled it to receive up to 15% of EPCG shares owned by the privatization funds before the expiration of the deadline for submitting of tenders for the sale of the state package of shares, and thus got its representative in the management of EPCG while the sale of shares took place,” it is stated in the complaint.
At the same time, they enabled offshore London-based company, River Financial Trading ltd and its secret owners to reach an unrealistic high commission of €6.8 million based on simulated contracts for the sale of shares of EPCG owned by privatization funds.
During the tender for the sale of the state package of EPCG shares, in April 2009, privatization funds were forced through River Financial Trading Ltd to sell their shares exclusively to the Italian company A2A.
By contracts concluded with privatization funds, River Financial Trading Limited pledged to find a buyer at a price of at least €7.1 per share, with an agreed commission of €0.35 per share, which represents as much as 5% of the mediation fee.
“From the contract concluded between River Financial Trading Limited and the Atlas Mont Fund, it can be seen that the privatization funds accessed this work through the Euro Fund managed by Veselin Barović. Thus, there is a reasonable doubt that Barović organized and enabled for all privatization funds to conclude a contract with River Financial through which A2A sold the shares of EPCG and on the basis of which the hidden owners of River Financial received €6.8 million euros,” it is stated in the complaint.
That these are simulated contracts and that the price of the shares of the privatization funds had already been agreed with EPCG, is proved precisely by the provision of the contract stating that, if the A2A withdrew, the offshore company River Financial Trading Limited would find another buyer. Therefore, River Financial Trading Limited had already agreed the price of the shares with A2A and the subject of the contract was not finding a customer since the buyer was already known and the price was agreed with it.
According to the Securities Commission’s documents, commission of €6.8 million was paid directly to the company River Financial Trading Limited. However, according to the financial documentation provided by that company to tax authorities in the United Kingdom, this commission is not stated and the company’s total balance in 2009 was £ 24,587.
Two months after the conclusion of the simulated contracts, at the end of July 2009, A2A offered €8.4 per share for a package of the state-owned shares of EPCG, which is as much as €1.3 per share higher than the price received by the funds, resulting in a suspicion that the River Financial Trading Limited was commissioned, not only by funds, but also by the buyer A2A.
Had the Greek consortium’s bid been accepted at a price of €11.1 euros per share, the state, funds and small shareholders would have received €170 million more than they received from A2A. Had the shares of EPCG not been sold to A2A prior to the closure of the tender procedure for the sale of the state-owned EPCG shares by the privatization funds, A2A would probably not have participated in the privatization of EPCG, which was announced by the Director of the Euro Fund, Bojša Šotra.
There were previous suspicions in the public that the entire deal was made by Milo Đukanović and Branimir Gvozdenović, and that Dušanka Jeknić and Damir Asović were negotiating on behalf of the company River Financial Trading Limited with privatization funds on the contract and the commission.
