Mineco responded to OCCRP after the series ran. In the interest of fairness, OCCRP is providing Mineco's response. OCCRP will respond to the response below.
MINECO reponse:
Mineco did not participate in failed privatisations in Serbia, nor does it have a problematic past. Mineco participated only in the privatisation of the Rudnik mine, declared by the Privatisation Agency as one of the best, which was also confirmed by the study of NALED and USAID. There is no investigation or any other proceeding related to the privatisation of Navip or any other company conducted against Mineco, or any of its representatives. Three Mineco representatives (among whom two former representatives at the time this text was written) were involved in the investigation related to the purchase of Navip real estate, one smaller building and part of business premises in another building, and all three are available to state authorities.
Poor management, dismissal of workers and insolvency of Navip have nothing to do with Mineco. Having estimated that with significant investments Navip can become a sound company, Mineco decided to try to take over this joint-stock company. Mineco bought smaller blocks of shares at the Belgrade stock exchange in the period from the end of 2007 until mid-2009. In addition, in late 2008, Mineco bought Lofi Investment, a company that held 13,078 shares of Navip at the time. Thereby, Mineco became the owner of 22.2 percent of shares of Navip in total. In the same period, the group from Bosnia-Herzegovina also bought shares, assuming control over 34 percent of shares of Navip. Mineco did not wish to enter into partnership with this group, which is why it sold its shareholding to this group in 2009. Since then, the group from Bosnia-Herzegovina completely manages Navip and acts as a majority owner before all authorities and banks. The insolvency proceedings of Navip were initiated in 2012, three years after Mineco sold its shares as a minority shareholder.
In the Serbian police report from 2011, false claims were presented: that Mineco participated in a fraud, embezzling 4 million euros, damaged Navip by two million euros and that a Mineco representative and Manager of Navip made an agreement to sell company property to Mineco at a price below market value. The investigation has conclusively determined that Mineco had overpaid the subject real estate. The fact that the Board of Directors of Navip had in 2005 for the first time announced the sale of business premises in 1, Strahinjića Bana St. and 38-40, Tadeuša Košćuška St, much earlier than Mineco had any knowledge of Navip’s operations, supports the fact that no agreement between the representatives of Mineco and Navip was made in advance. Having failed previously, in March 2008, Navip’s Executive Board announced the sale of real estate again. Mineco was the only bidder that answered the tender and offered to pay the price in bills of exchange. When the decision was made on the sale of real estate and the Sale-Purchase Agreement for Real Estate was entered into between Navip and Mineco, none of the members of Navip’s Executive Board were Mineco representatives, nor were they in any manner related to Mineco. The Executive Board of Navip accepted Mineco’s bid to pay the price in bills of exchange which Mineco purchased from Navip’s creditor TV ADV.
The purchase of Navip real estate using bills of exchange is completely in accordance with the law. TVADV d.o.o. had obtained Navip’s bills of exchange on the basis of a contractual relation through which TVADV became indebted to the tax administration, instead of Navip. In a completely legitimate legal transaction, Mineco bought the stated bills of exchange from TVADV, after TVADV made an offer in the market. Mineco did not perform a detailed analysis of the underlying legal transaction between TVADV and Navip, as it was not its legal obligation to do so, but determined the legitimacy of the bills of exchange through legal counsel. The purchase price of bills of exchange was agreed on the basis of free will of the seller and buyer, in accordance with the applicable laws and in the spirit of free market. From Navip’s point of view, the price at which Mineco bought the bills of exchange is utterly irrelevant, because for Navip, its own bills of exchange can only have the full nominal value. By accepting them as means of payment for the sold real estate, Navip had eliminated the full amount of its debt that was secured by the subject bills of exchange, i.e. was not damaged by Mineco in any manner whatsoever.
OCCRP Response:
Mineco is basing their claims on their belief that all investigations and court cases against them are rigged and that they purchased the state owned companies directly or through the stock market, rather than through the privatization process. Therefore they do not consider it a privatization. However, any purchase of state companies in any manner constitutes a privatization. OCCRP believes law enforcement considered this when they investigated the director of NAVIP, the privatized company, who sold the shares to Mineco, for illegal activities. OCCRP also cannot verify that any state agency considered the privatization well done although Mineco cites a private agency that may not have had access to law enforcement investigation files. OCCRP could not verify other claims. Therefore, OCCRP stands by its story as written.