The company’s foray into privatizing Serbian companies was a disaster.
Authorities in Romania and Serbia say a regional conglomerate is behind the collapse of a large privatized company in Serbia, the bribing of a judge in Romania to acquire a copper mine worth US$1 billion and was involved in what may have been industrial espionage in Romania for Russian interests.
Mineco AG, a Swiss-based company run by Serbian businessmen owns a number of Balkan companies involved in mineral exploration, mining, and agriculture. But the firm has been dogged by allegations of corruption and poor business practices.
Mineco board member Dimitrije (Miki) Aksentijević is accused along with a key aide by Romanian authorities of corruption. Yet they appear to live freely in England, where they manage their Balkans business empire.
Mineco was involved in the startling fall of National Winery and Agriculture (Navip), a well-known company that was once one of the biggest producers of wines, brandies and soft drinks in Serbia.
The state started selling its stake in the company in 2006 on the stock market but today the company, which was exporting millions of Euros worth of wine and brandy per year to the USA, Canada and Europe, has stopped production and is being prepped to be sold off.
All 11 subsidiaries of Navip are officially closed or not working and at least 100 hectares of vineyards and orchards have been mortgaged. The company’s property was valued at more than €21 million after entering the bankruptcy procedure in March 2012, while its debts totaled more than €20 million, according to bankruptcy trustee Vasilj Vasiljević. The company once employed 800 workers but today only about 50 remain to guard, maintain or sell off the company’s property.
Jovanka Radiša, 53, worked nearly half of her life in the Navip factory and is one of the hundreds of employees whose life changed because of the company’s closure. In December 2012, while she was preparing for a leg operation and expecting sick pay, she was fired along with 120 other workers. She now lives in her daughter’s house on state support of about €120 a month and is unable to cover her medical bills.
“Now it’s too late for me to get another job. Nobody will hire me at this age,” said Radiša. “Former (Navip) workers are now in a situation where they do not have money even for bread. They live in crisis and misery.”
Other former workers as well as the leader of the Navip union, Milan Babović, told the Organized Crime and Corruption Reporting Project (OCCRP) and the Center for Investigation Reporting in Serbia (CINS) similar stories of desperate times. Some of the Navip employees had never worked for any other company. Forty-eight former Navip workers, including Radiša, are suing the company.
In November 2011, Serbian police arrested a group of Navip’s and Mineco’s managers for abuses committed during the Navip privatization. Director of Mineco Ltd Aleksandar Andrejević managed to leave the country before his arrest and while the police could not find him, CINS/OCCRP located him immediately with one phone call to London.
After the arrest, the Navip union, led by Babović, seized control of the company. They took the company seal from Navip’s director and barred the managers from entering the company premises because they wanted to protect Navip, Babović explained.
He said it was the only option.
Navip is suing Babović and several other workers for abuse of rights. The lawsuits accuse the union representatives and others of unlawful payment of salaries, misuse of the company seal and autocracy.
Bankruptcy trustee Vasiljević says the layoffs of Navip workers were inevitable. "It was an unsuccessful privatization, which took place in difficult circumstances,” he said. “Everyone began to push their goals, not looking at the whole picture - the owners to draw out money they invested, the directors to maintain control and realize some profits, and the workers (to get) paid."
Mineco's Crumbling Empire
Mineco controls companies in Great Britain, Switzerland, the Netherlands, Cyprus, Romania, Bosnia and Herzegovina, Macedonia and Serbia, according to an investigation by OCCRP and CINS.
In Serbia, Mineco controls at least 12 companies. Besides NAVIP, Mineco and its subsidiaries purchased two mines -- Veliki Majdan and Rudnik – and two other companies in privatization: Fidelinka, which was one of largest producers of flour and Mlinoservis, once a big producer of industrial machinery and equipment for the food industry, both of which ended in bankruptcy or in financial trouble.
Dimitrije Aksentijević, is the son of Dragan Aksentijević, former director of a company that belonged to the import/export giant Genex group – one of the most powerful groups of companies in the former Yugoslavia during the Communist era.
Until 2002, the younger Aksentijević worked for Glencore – a multinational founded by fugitive American/Belgian financier Marc Rich that has been involved in various high profile scandals worldwide.
Documents indicate Dimitrije Aksentijević was involved in a corruption case in Romania in March 2012. His associate in the Romanian bribery case was Mineco Ltd. director Aleksandar Andrejević, the same man who fled from NAVIP as Serbian authorities arrested managers for privatization fraud. Prosecutors say Andrejević followed Aksentijević’s orders to give a €50,000 bribe to a Romanian judge in order to get a favorable judgment for Mineco in a court case involving assets of Moldomin, a bankrupt state-owned mining company. Romanian police arrested the judge, but Andrejević and Aksentijević fled Romania. They are currently being investigated.
Mineco has run afoul of the law in other cases, too. A Russian geologist Mineco hired in the Moldomin case was caught trying to take sensitive Romanian state maps of mineral deposits out of the country. He was initially charged with espionage by Romanian authorities but the charge was lessened to corruption.
Serbian Privatization Scam
Serbian police suspect that, after Mineco helped privatize Navip in Serbia, they signed deals that benefitted Mineco at the expense of Navip which ultimately ended up in bankruptcy.
From a London subsidiary, Mineco, through its subsidiary Lofi Investment, owns 22 percent of the shares of Navip. Marinković Commerce from Bosnia and Herzegovina, owned by Bosa Marinković, wife of a businessman and former company president Goran Marinković, owns another 34 percent of Navip. Babović told OCCRP/CINS the two were working together to control Navip. According to registration documents, a director of one of Marinković’s companies owns 10 percent of Lofi Investment through his Bosnian company Gobos Investment, while Mineco in London owns the rest.
In 2011, Serbian police discovered what they said was a €6 million “privatization scam” at Navip. According to the police report, three directors of Mineco - Dragan Tomić, Bogdan Komlenac and Aleksandar Andrejević – together with the director of Navip, Slobodan Lukić, were involved. Police also accused two other men—Bogdan Nikšić and Branislav Vučurević, owners of an advertising agency called TVADV which was Navip’s business partner--and nine tax inspectors of criminal activity.
While the trial for this case still hasn’t started, police have released details of how they believe the fraud was committed:
The directors are accused orchestrating Mineco’s purchase of Navip’s Belgrade business premises for $2 million below market price. Police charged them with damaging NAVIP to make an illegal profit for Mineco.
Police also accused the director of Navip and other defendants of tax evasion, neglecting to pay more than €4 million in taxes owed by Navip. They say the defendants got help from the nine tax inspectors who have since been arrested.
Here’s how police say it worked:
TVADV, the Serbian advertising company, became a partner with Navip in a joint venture in 2007. According to their agreement, Navip was to invest money in the project and TVADV would pay Navip's taxes.
But no taxes were paid. When tax inspectors came to inventory TVADV in order to sell its assets for taxes, the owners made a deal with them to inflate the value of the company’s assets up to 15 times. In the process, the state lost €4 million.
Non-existent office
Mineco now owns Navip’s former space in two buildings across from the Belgrade Zoo in the center of the Serbian capital. One building is the former Navip wine warehouse. Today, in disrepair, part of the building is a garage for the Mineco Plus employees. Next to it is a renovated building where Mineco owns space where three of Mineco’s subsidiaries -- Mineco Plus, Energy 4 You and Lofi Investments – have offices.
Reporters from OCCRP/CINS entered the office of Mineco Plus and talked with Sava Mandić, director of Mineco Plus – a four person company engaged, he said, in market research for the Mineco Ltd in London.
In his small and well-lit office, an award stands on the table thanking Mineco for buying two incubators for the charity "Fight for Babies."
Lofi Investment is the company through which Mineco owns Navip. Lofi is registered in the Serbian Business Registers Agency at the same address as Mineco Plus.''I really have no idea what Lofi investment is,” he said. “You must ask in London.”
He said that while he didn’t want to talk about the criminal charges, and in his opinion, Mineco did not damage Navip in the land deals.
In November 2011, when Serbian police arrested the group involved in the Navip privatization deal, Aleksandar Andrejević wasn’t among those arrested but police were looking for him. A few months later, he became involved in a corruption case in Romania, prosecutors say. He also fled in that case but has been charged for his role in the deal.
While police may not have been able to find him at the time, OCCRP/CINS located him a month ago at the company’s offices in London.
A woman who answered the phone at Mineco told a reporter Andrejević is usually in the office, but at the moment he was on a business trip. She said she informed him of our call but asked us to send all of our questions to Swiss-based Mineco. So far they have not responded.
Reporters sent emails to Dimitrije Aksentijević at an address provided by a Mineco subsidiary but there has been no response. A representative of the company said Aksentijević lived in the UK.
In addition to criminal charge against Goran Marinković and his wife Bosa, Navip workers blame them for bad management and signing harmful contracts that damaged Navip. In a complaint sent to prosecutors, they say the Marinković’s were selling Navip’s products to their Bosnian company at reduced prices. They also say Mineco lent €100,000 to Navip and secured the loan with expensive real estate that favored Mineco. That mortgage was put on Navip’s land and three more buildings in Novi Sad, the second largest city in Serbia. It is not clear the value of the buildings.
CINS/OCCRP reporters tried repeatedly to speak with Goran Marinković, but he postponed the interview four times and then stopped answering his phone.
Babović said that Dimitrije Aksentijević, who may live in the UK, has never visited Navip, but simply sent his lawyer to company meetings.
Other Purchases in Serbia
Beside NAVIP, Mineco purchased four state owned companies in Serbia, and two of them are in trouble.
Fidelinka, a flour factory that produces cereal and bakery products, has gone bankrupt. It used to have more than 300 workers; now, except for guards, nobody works there.
According to the bankruptcy trustee Zoran Stojanović, Mineco bought 19 percent of the company’s shares in 2005.
Documents show that in March 2009 Fidelinka accounts were blocked, and in July 2010 the company went bankrupt.
Mineco, together with another shareholder, Mowbray Systems Ltd, submitted two plans of reorganization to the Commercial Court in Subotica but these planes were not workable and were not accepted, said the bankruptcy trustee. Anything of value in the company was mortgaged, and now everything will be sold in order to pay off all creditors.
Since the company went bankrupt, other companies leased some assets of Fidelinka. A lease agreement for Fidelinka’s mills and equipment was signed between bankruptcy trustees and the company Agroposlovi; its director is Jelena Jovanović, wife of the Serbian politician and leader of the Liberal Democratic Party, Čedomir Jovanović.
In 2007, as well as today, Mineco owns 12 percent shares of Mlinoservis, another privatized Serbian company. This company was in bankruptcy between 2010 and June 2011 and today is active, but in bad shape. Among board members of this company was Bogdan Komlenac, a former Mineco Plus director later arrested in the Navip case, and a member of supervisory board was Andrejević, in 2011 wanted by both Serbian and Romanian police. A current member of the board of directors of Mlinoservis is Sava Mandić, who is also a current director of Mineco Plus.
Mandić said that when Mineco bought the company, it was engaged in servicing machines for the food industry and the plan was to use it to help Fidelinka, but it turned out to be a bad investment.
Mandić also said that Mlinoservis is in bad shape.
“There are about 40 workers and, believe me, I have not contacted them for a month; I do not know what's going on there. Machines - I don’t know if they are functioning, they have no heat, nothing. I mean, really, really a disaster! I feel sick even to call them (workers),” said Mandić.
Mineco also owns two mines in Serbia – Veliki Majdan and Rudnik.
