Investigative storiesFinancing the mediaPublic money

State aids Pink with € 3.9 million

30 May 2016
Ilustracija: Đorđe Matić
Serbian Export Credit and Insurance Agency (AOFI) aided Pink International Company, owned by Željko Mitrović, at least twice - with guarantees and loans at the total amount of € 3.9 million. AOFI has been refusing to provide any information on its business for six months already

When the state founded the Export Credit and Insurance Agency (AOFI) in 2005, the aim was to assist exporters and thus strengthen Serbian economy. Mlađan Dinkić, then Minister of finance, said that loans would not be granted to just anybody, but only to confirmed exporters.


Nine years later, in 2014, conditions on which assistance is granted and AOFI clients’ names are hidden from the eyes of the public. Almost six months after Center for Investigative Journalism of Serbia (CINS) filed its request for access to information, AOFI fails to provide more information about its work.


Still, CINS is publishing data on two contracts which AOFI concluded with Pink International Company, broadcaster of Pink television. CINS journalists obtained the documents investigating AOFI and Pink business operations within the Agency for Business Registers (APR).


The first contract shows that in August 2014 AOFI issued Pink a guarantee up to the amount of € 2.5 million, to the benefit of AIK Bank.


The second contract was concluded several months later, in December. This is when Pink was granted a € 1.4 million loan by AOFI to finance the company’s contracts with companies BH Telecom from Sarajevo and MTEL from Podgorica.


In the course of 2014, Pink appeared on Tax administration lists as one of the major tax debtors. At the time when the contract on guarantee was concluded, postponed payment of a part of the debt had still not been granted, so it remains unclear how this company met the AOFI condition that its clients must not have any outstanding tax liabilities.


Neither AOFI nor Pink wanted to talk to CINS journalists. CINS even filed questions to AOFI; however, by the time this story was published, there had been no reply. Some of these questions were: what were the grounds on which Pink fulfilled the condition to be granted the loan and guarantee if, at the same time, it was on the list of major tax debtors; what is the subject of the contracts for which AOFI granted the loan to Pink, and why requested information was not supplied even after the decision of the Commissioner for Information of Public Importance?


A business secret


On 8 August 2014, Pink and AOFI representatives signed a contract based on which AOFI, upon request of Pink, issued a guarantee at the amount of up to € 2.5 million, to the benefit of AIK Bank. The contract has at least one annex, signed on 27 August 2014.


The collateral for the issued guarantee, registered within the APR Register, to the benefit of AOFI as the creditor, is lien to Pink’s receivables based on contracts concluded with BH Telecom and MTEL.


These are two telecom operators, from Bosnia and Herzegovina (BiH) and Montenegro: BH Telecom is in majority ownership of Federation of BiH, while the Montenegrin MTEL is in the majority ownership of Telekom Serbia.


In a country like Serbia, where corruption is a chronic issue, it is certain that no one has the right to distribute money without rendering accounts to the public

Rodoljub Šabić

It was for the purpose of concluding new contracts with these two companies that AOFI granted Pink a loan several months later, on 10 December 2014. Željko Mitrović, owner of Pink International Company, and Dejan Vukotić, AOFI director, agreed that Pink should get a loan at the amount of € 1.4 million.


Pink guaranteed repayment of the loan with its promissory notes, bills of exchange of Air Pink Company, also owned by Mitrović, as well as bills of exchange of the cable operator Kopernikus technology. Another collateral included receivables on the contract according to which Pink sold licenses for the package of Pink channels to the Public Company Post of Serbia, i.e. its cable system, at the price of € 1 a month per package user.


As stated at the AOFI website, one of the conditions to be granted guarantees and loans is the statement from the Tax Administration on clearance of tax liabilities. In the course of 2014, Pink occurs on Tax Administration lists as one of major debtors.


Three days prior to concluding the contract on issuing guarantee, on 5 August 2014, only a part of Pink’s debt amounted to more than € 1.5 million at the time. This was when the Tax Administration was taking the decision whether to grant Pink postponement of this debt, which means that the debt was still current; thus, it is unclear how Pink managed to satisfy the AOFI requirement.


CINS tried to learn more about the debts and reprograms concluded with Pink, but the Tax Administration replied that data on taxpayers is classified.


The Contract on loan from 10 December 2014 reads that Pink confirms that all data, statements, and documents submitted to AOFI are correct, including those relating to regular payment of its tax and other liabilities to state bodies.


However, according to the Report on ownership structure and control of media of the Anti-Corruption Council, on 18 December 2014, eight days upon concluding the Contract on loan, Pink was late with repayment of installments after the 2013 reprogram.


Also, according to the data from the Tax Administration, on 31 December, except for three outstanding installments from the reprogram, Pink also had a current debt, thus it owned somewhat more than € 3.5 million.


Miroslava Milenović, member of the Anti-Corruption Council, says that according to this information she does not believe Pink fulfilled the conditions to be granted a loan by AOFI.


“Procedures and laws are not observed; instead, everything is ridiculed and being deprived of sense“, says Milenović.


Removing trails


Data on both contracts CINS obtained is recorded in the APR register of liens, where Pink provided receivables on contracts with companies BH Telecom, MTEL, and Post of Serbia as collateral.


Shortly after CINS published that AOFI refused to provide information, AOFI filed APR request to delete lien relating to the contract on loan with Pink from December 2014. The reason given for this was that Pink had settled all its liabilities after this loan. It remains unknown whether liabilities in relation to the guarantee were also settled, having in mind that no deleting was requested in relation to this lien until the moment of publishing of this story.


It remains unclear how Pink fulfilled the AOFI condition that its clients must not have any outstanding tax liabilities.

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For the moment being, it remains secret whether these are the only contracts AOFI concluded with Pink. Names of other companies are also unfamiliar, as well as the conditions under which they became AOFI clients.


In the beginning of December last year, CINS journalists requested all documents relating to contracts with Pink, as well as information on other AOFI clients. Almost six months has passed since then, but access to information has still not been granted.


“The requested information which relates to business arrangements with the ‘Pink International Company’ is business secret and may not be made available to third parties” – this is how AOFI justified its failure to submit the contract with Pink to CINS journalists to the Commissioner for Information of Public Importance.


Upon appeal, the Commissioner passed a decision to the benefit of CINS, and fined AOFI twice at the total amount of 200,000 dinars. On 16 May, the Commissioner published that he had addressed Serbian Government a request to ensure enforcement of his decision, that is, to practically force AOFI to supply information.


The Government mostly ignores such requests of the Commissioner, which CINS already wrote about.


Rodoljub Šabić, Commissioner for Information of Public Importance, says that the public in Serbia is guaranteed the right to know by the Constitution and laws, and that some secrets may be protected, but that this is not acceptable when it comes to public money.


“In a country like Serbia, where corruption is a chronic issue, it is certain that no one has the right to distribute money without rendering accounts to the public”, says Šabić.


The story has been produced under an EU funded grant, awarded in the Media Programme 2014. The contents of this publication are the sole responsibility of the Center for Investigative Journalism of Serbia and can in no way be taken to reflect the views of the EU.


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