The Board of Directors (BoD) "Regional Water Supply Montenegrin Coast" assessed as scandalous the attempt to accuse the management of the Regional Water Supply and the members of the Board of having damaged the company by allegedly dropping negotiations with the Austrian Štrabag.
This was announced by the Regional Water Supply after the Board of Directors meeting where the final Report of the SAI Control Audit and the views of the Audit Committee of the Regional Water Supply were discussed.
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.
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"We remind you that in July 2017, the collegium of the SAI, whose work was managed by Zoran Jelić, issued a total of 36 recommendations, of which 32 recommendations refer to the Company, and four recommendations refer to other state bodies. Through a control audit in 2019 it was determined that 90% of the recommendations were implemented, which testifies to the responsible approach and seriousness of the subject of the audit. damage caused to the Company, i.e. to state property. On the other hand, the Management Board considers as scandalous the attempt to accuse the management of the Regional Water Supply and the members of the Management Board of having damaged the company by allegedly leaking negotiations with Štrabag AG. For the sake of proper information to the public, the only negotiations between the Regional Water Supply and Štrabag AG are conducted in 2014, which were unilaterally terminated after two days by Štrabag AG, who then initiated legal proceedings before the Montenegrin courts to recognize the non-contractual, and therefore incompetent, arbitration decision from Paris," the statement of the Supervisory Board states.
The Board of Directors claims that it is incorrect that the negotiations were conducted in 2017, in January of that year, Štrabag through the Ministry of Finance initiated negotiations, but only on the dynamics of payment of the entire amount of 12 million euros.
"In order to prove the views of the Regional Waterworks, the above-mentioned correspondence between the Ministry of Finance, Štrabag and the Regional Waterworks was presented to the interested public on the company's website. In January 2017, the court proceedings before the Commercial Court of Montenegro were still ongoing and the question arises as to who would paid a multimillion-dollar amount without documentary basis, for works that were not performed, while the court proceedings are still ongoing. At that moment (January 2017), we have three decisions of the Commercial Court in favor of the Regional Waterworks, and already in March 2017, the same court and for the fourth time rejected the request of Štrabag AG for the recognition and enforcement of the non-jurisdictional and non-contractual arbitration decision from Paris, in accordance with the UN Convention on the Recognition and Enforcement of International Arbitrations and on the basis of the Montenegrin Law on Arbitration," the announcement states.
As it is added, the Board of Directors, with a touch of professional disappointment, noted as a gross falsehood that there was a single request of the DRI collegium for the submission of any document, which the Regional Waterworks did not fully comply with.
"The Board of Directors remains with the position from 2017 and emphasizes again that the dilemma of different interpretations of International Accounting Standards 16 and 39 should be resolved at the professional level, due to different positions, on the one hand, by the collegium of the SAI, and on the other hand, by the external auditors from the ranks of the big four on the global at the level of "Ernst & Young" and "Deloitte", the World Bank, the EBRD, professors of the Faculty of Economics of the University of Montenegro, the Institute of Certified Accountants of Montenegro and the Regional Water Supply. positions regarding the different interpretation of the application of the IAS, by the above-mentioned institutions, because this is the only correct way, based on the audit profession and the law, to solve this professional dilemma" the announcement reads.
Unfounded claims regarding the Investment and Development Fund
The Board of Directors of the Regional Water Supply indignantly rejects as unfounded the claims of the competent SAI collegium, that the Regional Water Supply influenced the wrong decisions of the Government as the founder, regarding the transformation of the company, and regarding the participation of the Investment and Development Fund in the ownership structure of the Regional Water Supply.
"The Board of Directors uses this opportunity to publicly emphasize the professionalism of all the employees and management of the Regional Water Supply and over a hundred partners, who, through the account blocking period that lasted for 268 days, preserved the functionality of the regional water supply system and thereby enabled the successful completion of two tourist seasons, as the basis of the entire economic system of Montenegro. We expect a new decision of the Constitutional Court regarding the dispute with Štrabag, which confirms our consistency that the competent state institutions establish the truth regarding this economic dispute that has been going on since 2009," the statement reads.
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