The Austrian company Štrabag was ready to collect EUR 7,63 million from JP Regionalni Vodvodsk instead of nearly EUR 12 million, which it received in international arbitration in 2013 because this state enterprise unilaterally terminated the contract with that company. The Regional Water Supply offered 2,1 million, but an agreement in favor of both parties was not reached, and the offer of Štrabag to reduce the cost for the Regional Water Supply was dropped.
This information was obtained by the State Audit Institution (DRI), which conducted a control audit of the implementation of the recommendations it gave to the Regional Waterworks two years ago.
"Based on the established factual situation, the SAI appreciates the existence of undisputed obligations towards Štrabag, the arbitration decision of the MTK and the three judgments of the Court of Appeal, which annul the decision of the Commercial Court and return the case for retrial, should have been recognized as a risk factor for the company, and the same should have been in the period until the final decision of the Appellate Court, in the negotiations with Štrabag, he will try to negotiate a lower amount of damages than the one that was paid", the SAI warned in the control audit.
The SAI determined that the Regional Waterworks, headed by Goran Jevrić, tried to hide from them the documentation related to this case, which the SAI assessed as an important issue, that they did not give them one part of the documentation, while the other part was received from Ministry of Finance. The SAI states that they also received incorrect information from the Regional Waterworks, and they determined this after comparing the minutes from the meetings of the board of directors with the letters that Jervić sent them during the audit control.
Yesterday, "Vijesti" tried to get a comment from Jevrić regarding this case, but he did not respond to the phone call and SMS.
"On June 30, 2014, Jevrić told the Board of Directors that the arbitration decision is not valid and that it should be decided not to disclose it until the legally final conclusion of the procedure for its recognition, which Štrabag initiated at the Commercial Court", states DRi in the audit.
The SAI in the report points to another potential damage that the Regional Waterworks can do to the state budget in the amount of EUR 7,93 million, which is the value of the share of the Investment and Development Fund if it were to exit the ownership structure.
Under the scrutiny of SDT
The Special State Prosecutor's Office (SDT) confirmed to "Vijesti" that it had opened several cases related to the operations of this state-owned enterprise, and the SAI disclosed in its report that the Police Directorate (Criminal Police Sector - Department for Suppression of Economic Crime) requested them at the beginning of October audit report from 2017.
The SAI states that it will submit the control audit to the SDT and the Police Directorate. The audit was led by Senator Zoran Jelić, while the other member of the collegium was Senator Branislav Radulović.
In March 2013, the International Chamber of Commerce (ITC) in Paris ruled that the Regional Water Supply Company must pay the Austrian company 9.457.280 euros in principal, 1.063.912 in interest, 501.693 in court costs and interest on the amount of 190.000 euros given by Štrabag. as a guarantee at the court in Vienna against the activation of the operative guarantee.
After that, the regional water supply company announced that it does not recognize the decision of the Paris arbitration and asked for new negotiations with Strabag. However, in 2014, Štrabag initiated the procedure of recognition of the decision of the arbitration procedure with the domestic courts. The Commercial Court refused to confirm the decision three times, and the Court of Appeal annulled the decision each time and asked for a re-decision, which it finally did in August last year, when the account of the state-owned company was blocked for the collection of less than 12 million euros.
Who is he telling the truth to?
According to the DRI, when it became certain that Štrabag would collect all 12 million euros through the blocking of the company's account, Jervić told the Management Board in July 2018 that a media strategy should be prepared in cooperation with the Minister of Tourism Pavlo Radulović because "the whole situation is unfolding at a very sensitive moment when the adoption of poorly thought-out measures could negatively affect the outcome of the summer tourist season".
The Supreme Audit Office states that in one of the records of the company it is written that Jervić on 10.09. In 2018, informed the Board of Directors that they were waiting for a response from Strabag to the letter they sent on September 3, 2018, which requested a temporary suspension of account blocking until September 30, when a "sustainable model for solving the business challenge from 2009" would be agreed upon. ., which would be acceptable to all parties in the dispute, as well as for Štrabag to submit a proposal for the date of the meeting as soon as possible, so that they could immediately start negotiations and reach an agreement on the model for resolving the dispute.
"However, in the information submitted to the SAI regarding the dispute with Štrabag, it is stated that the renewed attempt to reach an agreement with the Štrabag company was on August 17.08.2018, 15.09.2018. year, when a letter sent by the Minister of Tourism Pavle Radulović and the director of the Regional Waterworks Goran Jervić requested a temporary suspension of forced collection until September 30.08.2018, XNUMX. in order to protect state interests and ensure the regular development of the tourist season. Štrabag responded to that request on August XNUMX, XNUMX. when it was stated that the temporary suspension of payment is not in the best interest of Štrabag, with an unacceptable precondition for any negotiations that would refer to the final withdrawal of the Regional Water Supply from further attempts to challenge the arbitration decision", says DRI.
Lobbying and pressures
The supreme audit states that, after recommendations were given two years ago that must be implemented, Jervić tried to exert pressure through the Assembly and the Government in order to get support not to implement some recommendations, so it was concluded that the Management Board should prepare detailed information with recommendations and to submit it to the Government, the Ministries of Tourism and Finance and the Parliament.
"DRI found out that, in addition to the above addresses, the same was sent to the Deputy Prime Minister for Economic Policy and Financial System, Milutin Simović, the presidents of the parliamentary committees for tourism and economy, Petar Ivanović and Predrag Sekulić. The Board for Tourism is 22.12.2017. organized a consultative hearing and enabled the director of the company (Jevrić) to present a pamphlet directed against the SAI," the report stated.
It is also stated that during the control of the audit, Jervić requested that a joint meeting of the SAI, the Regional Waterworks, audit firms "Ernes and Jang" and "Diloit" be organized and that the Institute of Certified Accountants chair it.
"The company informs that during the field work during the control audit, a meeting was held between the members of the audit team of the SAI and the representatives of the Regional Waterworks regarding the achievement of the same position regarding the method of recording and applying IAS. The company made a record of the alleged "meeting" and submitted it to Ivanović and Sekulić. The SAI audit team's scandalous attempt to make a record of a meeting that was not held from the daily communication of the audit team with the representatives of the subject of audit was deemed unacceptable and void, which it informed the company and the presidents of the tourism board in writing on 08.05.2019/XNUMX/XNUMX. economy", it was emphasized in the control audit.
As it is added, the Regional Waterworks led a continuous media campaign and initiated political pressure on the executive and legislative authorities in order to force the SAI to abandon its findings.
"The company has developed pressure strategies on institutions (domestic and foreign), which consist in obtaining and paying for opinions from independent experts that they use primarily in the process of proving their rights. Obtaining opinions in the process of proving is not illegal, because in accordance with the principle of independence, every institution established by law decides which evidence to accept and which not. The company shows a low level of tolerance towards the decisions of institutions that are not in its favor and launches media campaigns and political pressure in order to defend its actions, even if they were wrong and thoughtless," he writes. in the report.
DRI: An unnecessary expense of eight million is being made to the budget
The SAI in the report points to another potential damage that the Regional Waterworks can do to the state budget in the amount of 7,93 million euros due to the eventual exit of the IRF.
As explained, through the process of transformation from a public company to a limited liability company (DOO), the Regional Waterworks wants to expel the Investment and Development Fund (IRF) from the founding structure, which has a stake of 12,10 percent (7,93 million), while the rest belongs to the Government.
SAI states that the Board of Directors adopted conclusions on the adoption of the Director's Information on Transformation, in which it was stated that "the Board of Directors believes that the Government should be the sole founder".
"DRI believes that the board of directors made debatable conclusions regarding the transformation into a single-member company, because the director and the board of directors were aware of the ownership structure. In addition, conclusions were drawn that were not supported by the role structure in the company defined by the authorized appraiser 'Appraisal Associates', who was hired by the company," the report reads.
As it is added, the Government made the decision on the establishment of the DOO based on the information provided to it in November 2017, and in that decision the fact about the role played by the IRF was ignored, which was thus put in an unenviable situation where it cannot justify its long-term placements in the Regional Waterworks.
"After the adoption of the decision, the IRF addressed the Regional Waterworks several times, but did not receive a response. After several addresses of the representatives of the IRF to Simović, Radulović and the Minister of Finance Darko Radunović, a meeting was organized at the beginning of 2018 between the IRF and the company, where two model - for IRF to continue to be the founder or to be compensated," the report states.
From the documents received by the SAI during the audit process, it can be seen that Jervić and the Management Board stated at one of the sessions that they "have the absolute support of Radulović and Radunović".
After 18 months from the adoption of the decision to establish an LLC, in July of this year, the government considered the information on the activities necessary for the start of the operation of the LLC with the proposal of the Statute. Those two documents were proposed by the Ministry of Tourism.
DRI states that after that the IRF again warned about the harmful consequences that could result from the loss of roles. He is also asking for the money to be paid to him from the budget in installments from January of the following year.
"DRI believes that a significantly more expensive and complicated option was chosen in this way. In addition, IRF was illegally deprived of its share in the Regional Waterworks. Given that IRF's undisputed share must be regressed to this business entity, DRI points to the unnecessary an expenditure for the state budget of 7,93 million, increased by interest (if it is not a one-time payment)", the SAI concluded.
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