Serbia targets corruption as part of EU integration drive

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The fight against corruption is one of the key conditions for Serbia’s EU integration and one of the current government’s priorities. Serbian authorities on 12 December arrested one of the richest people the country in a crackdown on graft, writes EURACTIV Serbia. is the Serbian affiliate member of the EURACTIV network, which comprises 15 websites in 15 countries. The service is run thanks to the participation of the BETA news agency.

“The Serbian authorities on 12 December arrested the Delta Holding owner and one of the richest people in Serbia, Miroslav Miskovic, along with nine other people on suspicion that they appropriated property worth more than €25 million during a privatisation of road companies.

Among the arrested are Miskovic’s son Marko and Milo Djuraskovic, owner of Nibens Group, Share Corporation and road maintenance company Preduzece za Puteve (PZP) Nis. They were placed in 48-hour custody.

According to the criminal report, in the period between 2005 and 2010 the arrested co-owners of the privatised PZP Nis – and through it as co-owners in other road companies – unjustifiably drew money from those companies and appropriated property worth about 2.870 billion dinars (a little over €25 million).

Miskovic’s arrest followed several rounds of questioning which he has voluntarily gone in for over the last few days, as part of probes into several controversial privatisations. Another subject of investigation is the conversion of land in New Belgrade, where Miskovic’s real estate company Delreal is to do construction works.

Miskovic was questioned with regard to Delreal in early December as was his son regarding Nibens Group. Marko Miskovic then tried to leave the country, but police stopped him at the Belgrade airport and took his passport.

Delta Holding announced on 12 December that it was absolutely sure of the legality of Miskovic’s and the company’s operations.

“We believe that there is a rule of law in Serbia and that the final decision of the official state bodies will be made on the grounds of facts, rather than on the grounds of fabricated affairs and allegations by certain tabloids,” the company statement read.

Sources say that the Delta company, employing nearly 8,000 people, doesn’t necessarily have to be in trouble, or fail, only because its leader is involved in a legal dispute. It is also unclear how the arrest will influence foreign investors, already steering clear of Serbia.

The European Commission is also demanding an investigation into 24 controversial privatisations in Serbia, as part of the European integration process. Serbian authorities confirmed Miskovic’s name was connected to a few suspicious privatisation cases.

The European Union’s foreign ministers reached an agreement on 11 December about evaluating whether Serbia complied with all conditions for launching membership talks with the 27-nation bloc in spring, and, if the assessment is favourable, to set a date for the negotiations to begin.

Although the ministers were expected to state in the conclusions that, should the assessment turn out to be positive, the talks would start in June, Serbian officials welcomed the conclusions as encouragement to Serbia.

Prime Minister Ivica Dacic said the decision was good news for Serbian citizens. Belgrade media quoted him as saying that Serbia had never been closer to the EU and had never had the support of nearly the whole Union.

The fight against corruption is one of the key conditions for the country’s progress towards the EU and the new government’s priority. Activities in the battle against corruption and abuse are led by the first deputy prime minister, Aleksandar Vucic, who is the new president of the Serbian Progressive Party – the biggest party in the ruling coalition.

He announced a tough crackdown on corruption and abuse and judging by some of his statements one could have expected an investigation of Miskovic’s operations to come into focus at some point.

“Serbian people now see, you can’t make deals with the state when it comes to the fight against criminal and corruption. The state won’t allow anyone to play with it”, said Vucic.

The last two months have been marked by numerous sparks on the Vucic-Miskovic line, and Vucic earlier claimed that Miskovic was trying to bring down the government and push the Progressive Party out, in a bid to avoid a closer look at his business.

Other coalition partners on 12 December emphasised the government’s unity in the fight against corruption and added that Miskovic’s arrest had proven that the law applies equally to all.

“No one is untouchable and privileged as far as the law is concerned,” said Marko Selakovic, spokesman of the United Regions of Serbia, the smaller partner in the ruling coalition.

Asked whether Miskovic’s arrest could cause internal shock waves in the Serbian government, a representative of the prime minister’s Socialist Party of Serbia, Djordje Milicevic, said that the government and the parliamentary majority were gathered around essential principles and that as long as those principles were realised jointly, there would be a government and a parliamentary majority.

For one of the wealthiest Serbs, who has for years been labelled an unproven monopolist in the retail sector, this is not the first unpleasant encounter with the authorities: 10 years ago, without a single word, he paid 4.3 million German D-Marks in extra profit tax, while in 2007 the authorities attempted to prove the monopoly of retail chain Maxi, which was purchased by Belgian Delhaize last year.

Miskovic’s arrest has even broader importance if one takes into account his long-time influence on the most important political trends in the country, as the richest man in Serbia.

Miskovic has for two decades exemplified the effect that big business has on big politics in Serbia. However, except for the current Serbian president and former leader of the Serbian Progressive Party, Tomislav Nikolic, who admitted his party was financed by Miskovic in 2008, all other leaders denied connections to this businessman. Miskovic, himself, never spoke in public, except at his company’s gatherings and celebrations.

He took up politics before immersing himself in the world of business. Early in 1990, he was appointed deputy prime minister of the last Serbian cabinet under the socialist one-party system.

After leaving the government, he founded a private company called Delta M, which handled imports, exports and banking operations.

In the late 1990s, he succeeded in getting his name taken off of a “black list” of individuals who were placed on the list owing to their close ties to the Milosevic regime and barred entry to the EU.

In 2001, Miskovic was kidnapped in New Belgrade by the so-called Zemun gang, the same criminal group that was accused of murdering Serbian prime minister Zoran Djindjic. The media reported that his family was forced to pay 5 million German D-Marks in ransom.

According to the 2002 extra profit law, Miskovic paid 4.3 million German D-Marks worth of taxes. The extra profit tax was aimed at companies that had used their government connections to amass fortune as monopolies during the Milosevic era.

In public, Miskovic has for years been synonymous with retail market monopoly in Serbia, but it was never officially proved.

Last year Miskovic sold the Maxi retailer to Belgian Delhaize in 2011 for €932.5 million, including the €300 million debt to suppliers.

However, the Delta corporation still tops business operations in Serbia and regionally. The company, which once employed almost 25,000 people, has after the sale of Maxi about 7,700 workers.

The company’s total annual turnover during the last decade (2001-2010) was €11.5 billion which is nominally a third of today’s Serbian GDP.

The Delta corporation today also operates in Bosnia, Montenegro, Albania, Russia, Switzerland and Bulgaria.

Delta ranked 188th on auditing and consultancy company Deloitte’s traditional list of Central Europe’s top 500 companies in the category of sales, in September 2012.

In 2007, Miskovic found himself on the 891st place on Forbes’ list of richest people for the first time, with a fortune estimated at $1.5 billion.”

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