In December 2020, the Government of Montenegro borrowed in the amount of EUR 750.000.000,00 contrary to the provisions of the Law on the Budget for that year, the amount of credit debt planned by the Law on the Budget for 2020 was exceeded and there was no authorization to sign, regarding amount of funds, as well as borrowing needs.
This is written in the Government's Information on the realized issue of bonds, which were issued on the international market in 2020, and which was submitted to the Special State Prosecutor's Office on February 27 of this year.
The SDT combined the Government Information with the already formed criminal case, which was initiated in the investigative phase in December 2021 based on the criminal charges filed by the deputy of the Democratic Front for the criminal offense of abuse of official position. Nebojsa Medojevic and the NGO "Montenegro International" against the former Minister of Finance Milojko Spajić.
During the investigation, the SDT collects information, evidence and data, which they need to make a decision on whether this job, which was the largest single charge in the history of Montenegro, may have contained elements for the initiation of a criminal investigation.
At the session of the Government of Montenegro, on February 24 this year, the current Minister of Finance Aleksandar Damjanović requested that the legality of this debt be reviewed, and then three days later the Government forwarded the Information on the issue of bonds to SDT...
At the session, Damjanović demanded that the legality of the entire procedure with monitoring the flow of money on the domestic and international financial market be reviewed, with an attempt to find out who was granted the discount of 3,51 million euros, which, according to him, opens up the possibility abuse and illegal enrichment of third parties by using public finances to obtain illegal profits.
Focus on the discount of 3,5 million
In the Government Information submitted to the SDT, it is written that during the realization of the bond issuance transaction, in addition to the compensation to the banks for mediation and organization of the work, according to the Mandate letter signed with the banks on December 7, 2020, (0,18%), in the amount of 1.350.000,00. €0,468, calculated and fee - discount to bond buyers when purchasing (3.510.000,00%) in the amount of €XNUMX (the amount deducted from the total issue of bonds).
"In addition to breaking the compensation percentage, this obligation is not defined either by the Mandate letter or the Contract, and in this part it is necessary to carry out investigative actions in terms of the justification of the implementation of these activities", the Government states in the Information submitted to the SDT.
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Exceeded the plan
In the Government document, which "Vijesti" had access to, it is written that the Budget Law for 2020 and the Law on Amendments to the Budget Law for that year planned to cover the deficit on the basis of loans in the amount of 331.489.594,85 € for the purpose of financing the additional costs of the budget for 2020, as well as for the purpose of creating a fiscal reserve for financing the budget for 2021.
"Article 13 of the Law specifies the purposes for which the Government will sign credit agreements in 2020 or will become effective, in the amount of 327.000.000,00 euros. Furthermore, Article 14 paragraph 1 of the same Law prescribes that the missing funds for financing the budget in 2020 amount to 878.000.000,00 euros, while paragraph 2 prescribes that in 1 the Government will use deposits to finance the needs from paragraph 2020 of this article in the amount of 540,000,000.00, while the remaining funds in the amount of 338.000.000,00 euros will be provided through credit on the international and domestic markets, as well as through donations," it is written in the Government Information.
In December 2020, the Government borrowed in the amount of EUR 750.000.000,00, and the Government Information says that this was done contrary to the provisions of Article 1, Paragraph 1, Article 13 and Article 14, Paragraphs 2,3, 4 and 2020 of the Law on the Budget for XNUMX. ...
"The amount of credit debt, planned by the Law on the Budget for 2020, was exceeded and there was no authorization to sign the amount of funds, as well as the need for borrowing in accordance with Article 13 of the Law on the Budget for 2020. Namely, the bonds were issued at an interest rate of 2,875%, and issued at a discount of 99,532%, the maturity date of the said bonds is December 16, 2027. For the implementation of this work, international financial institutions were engaged: Erste Group, City Group, Societe Generale and Bofa Securities", states the Government.
Without the amen of the Assembly
In the information they received from the Government, the SDT notes that the borrowing of the state at the end of 2020 was carried out by the Ministry of Finance and Social Welfare after the publication of the prospectus on the issue of bonds, despite the limitations specified in the legal provisions and without the publication of the Decision on credit indebtedness, which is provided for by the provisions of the Constitution of Montenegro. Article 82, paragraph 1, indent 3 above.
"Constitutional provisions prescribe that the Assembly passes other regulations and general acts (decisions, conclusions, declarations and recommendations) and paragraph 18 which stipulates that the Assembly issues public loans and decides on the indebtedness of Montenegro", states the Government.
They also wrote that it is important to point out that the engagement of legal entities on mediation and consulting services was carried out contrary to Articles 8, 9, 10, 13 and 14 of the Law on Public Procurement.
Costs over 5 million
The government, by reviewing the available documentation, as well as according to the data of the audit of the Law on the final budget account for 2020, which was carried out by the State Audit Institution, determined that during the issue of bonds, transaction costs were calculated in the amount of 5.098.594,31 euros.
"Discount to bond buyers when purchasing (0,468%) in the amount of EUR 3.510.000,00 (the amount deducted from the total bond issue), compensation to banks for mediation and organization of work, according to the Mandate letter signed with the banks on December 7, 2020 , (0,18%), in the amount of 1.350.000,00 euros. Fees for legal advisers, online roadshow costs of Erste Bank and costs of organization of the global call of Societe Generale Bank, in the amount of 113.594,31 euros. Fee for Linklaters legal advisor, according to the contract with Linklaters dated December 7, 2020, in the amount of EUR 125.000,00. The payment of the costs incurred during the transaction is foreseen from the issue of bonds, with the exception of the fee for the Linklaters legal advisor in the amount of 125.000,00", states the Government.
They informed the SDT that they found that after exempting expenses based on various fees, excluding the amount of compensation for Linklaters, on December 16, 2020, an inflow of 745.026.405,69 euros was recorded on the account of the Ministry based on the issue.
"We point out that when considering the Information on the starting points for the realization of the issue of bonds that will be issued/issued on the international market in 2020 or in 2021, with the proposed conclusions from December 7, 2020, an integral part of the material and explanation in the part that refers to the costs of hiring banks and legal advisers. In the same, it is stated that the costs of engaging banks will be defined by the Mandate letter, which will be concluded between the banks and the ministry responsible for financial affairs. Also, it was stated that the commission for services related to the issuance of bank bonds ranges up to 0,18% of the value of the bond issue with a maturity of up to 7 years, or 0,20% for the issuance of bonds with a maturity of up to 10 years. In addition to the above, costs related to logistics activities related to the realization of the transaction are also foreseen, with total expected costs that will not amount to more than 0,25% of the realized transaction", stated the Government.
They also pointed out that the protector of property and legal interests of Montenegro, according to Article 61 of the Budget Law, issues a legal opinion at the request of the creditor confirming that the constitutional and legal borrowing procedure has been followed, which was not obtained in this procedure.
"The solution was fictitiously implemented through the State Treasury"
In their address to the SDT, they also stated that the then Minister of Finance and Social Welfare, Milojko Spajić, issued Decision No. 06-6016/1 of December 23, 2020, which was "fictitiously implemented through the State Treasury with an order to make the following entries" ...
The government has counted the outflows and inflows in budget positions, based on the issue of bonds, as of December 16, 2020...
"It is important to point out that the explanation of the decision does not contain a call to the conclusion of the Government of Montenegro, which approves the mentioned transactions, while the mentioned inflows and outflows, which occurred on December 16, 12, are stated as a result of Montenegro's borrowing on the international financial market by basis of EUROBOND bonds in the amount of €2020 and in accordance with the notification of Citigroup Global Markets Limited, Erste Group Bank AG, Merrill Lynch International Societe Generale Bank dated 750.000.000,00/18/12", writes the Government.
They also stated that acting according to Spajić's decision, a payment order was prepared in the treasury, for the transfer of funds to the Central Bank of Montenegro, in the amount of EUR 3.510.000,00.
"In this regard, and as it has already been established that the reduction of the bond issue in the mentioned amount was already carried out and if the cost discount to the customers was not defined by the contractual obligation, this Ministry requested a confirmation from the Central Bank of Montenegro, about the details of the transaction that was recorded in the State Treasury December 16, 12, in the amount of €2020, in terms of which entity the payment was made further. In relation to the requested data, the Central Bank of Montenegro, by Act No. 3.510.000,00-0102-1304/2 dated February 2023, 8, submitted a notification that on December 2, 2023, there was no payment in the amount of 16. €12 from the account of the Ministry of Finance (account no. 2020-3.510.000,00-907) to the account of the Central Bank of Montenegro (account no. 0000000083001-19)", it is stated in the Government Information.
They indicated that 3,5 million euros were withheld from foreign banks, with the possibility of transferring the money to legal and physical persons, as well as the possibility, as they stated, of bribery and other abuses.
"All these activities were carried out after the roll call of several deputies and analysts, who publicly advertised on this occasion. Bearing in mind the above, it is important to highlight the fact that after all the activities carried out in the Law on the final account of the budget of Montenegro for the year 2020, a transfer in the amount of €750.000.000,00 based on the issue of Euroboard bonds - long-term securities from value, for financing the budget and creating a fiscal reserve, while, as stated above, the inflow of funds based on the issue was recorded on the account of the State Treasury on December 16, 12, in the total amount of €2020," he states. Government.
Spajić: Political attack
The leader of the Europe Now Movement, Milojko Spajić, previously told reporters that Finance Minister Aleksandar Damjanović had "never heard of the term discount bond".
"Every year when Montenegro entered the market, it had a discount. Let me clarify - the discount is the amount that the creditor keeps in order to reduce the interest for the person who takes the loan", Spajić said.
He said that the accusations are a "political attack" and that "this shows Damjanović's indolence and ignorance."
"Damjanović brought us back 11,12, XNUMX years, to a period of expensive borrowing".
Spajić also said that this kind of action is "a return to the 30-year-old taking from the mouths of citizens."
He then announced a lawsuit regarding, as he said, untruths about the fictitious transfer of 3,5 million euros to the account of the Central Bank (CBCG) as part of the issue of government bonds from 2020.
"The United Democratic Party of Socialists (DPS) from the 90s repeats a false pre-election story that was verified by all Montenegrin, British and American institutions responsible for issuing bonds," Spajić wrote on his Twitter account, adding:
"Your slander will not pass," Spajić added.
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