The first bank did not inform its second largest shareholder, Elektroprivreda Crne Gore (EPCG) with 19,75 percent of shares, that it had scheduled an extraordinary Shareholders' Meeting for February 9 with the agenda of electing a new Supervisory Board. Because of this, EPCG will not be able to use the right to propose two representatives to this body, nor to replace the existing representative, "Vijesti" learns.
This continues the conflict between the state company EPCG and Prva banka, of which it is the largest shareholder Aco Djukanovic, brother of the former president of the state and DPS Milo Đukanović.
In 2021, EPCG was also prevented from getting two members of the then Board of Directors, because the First Bank and the Central Bank, which he then managed Radoje Žugić, delayed the approval of the appointment Nebojše Medojevića, and that position was eventually won by a group of shareholders gathered around Đukanović.
“You sent it late...”
Then he was appointed to the Management Board, later the Supervisory Board, in front of EPCG Velizar Colović. According to "Vijesti" information, EPCG is not satisfied with the way Čolović represents them, which is why on February 2 they requested that their new representative be Miro Vračar, advisor to the executive director of EPCG, as well as to be their second member in the Supervisory Board of the bank Marina Šljivančanin, who is the head of the Finance Department at EPCG.
However, Prva banka informed EPCG yesterday that they sent the candidacies late, that the Shareholders' Assembly cannot be postponed, and that only two members (from the group of shareholders gathered around Đukanović) will be replaced for whom the candidacy was sent earlier, and that for the others, the continuation of the mandate will only be stated.
This response caused resentment in EPCG, because they believe that Prva banka prevents them from exercising their rights as shareholders for procedural reasons.
On December 28, the Supervisory Board of Prva banka, due to the resignation of one member, Zoran Pažin, scheduled an extraordinary Shareholders' Meeting for February 9, but announced the decision only on the bank's website and in one printed media, without directly notifying the shareholders. Pažin is a member of the DPS Presidency, he was the Minister of Justice in the Government of Milo Đukanović in 2015 and 2016, and later in the Government Duško Marković Deputy Prime Minister and Minister of Justice. In September 2021, he was elected to the board of Prva banka, in front of the shareholder group Aco Đukanović.
Violation of corporate practice
The "Vijesti" source from the capital market said that Prva banka, by announcing the decision to convene the Assembly on the website and in one printed medium, formally fulfilled the legal obligation, but also that the principle of good corporate practice stipulates that the shareholders are directly informed of the appointment of the Assembly. by e-mail or post, especially those who have more than five percent of shares, who also have the right to nominate members of the Supervisory and Management Boards.
EPCG unofficially told "Vijesta" that they found out about the scheduled Shareholders' Meeting by accident last week from the media, that is, that even their representative at Prva banka did not inform them about it.
The Board of Directors of EPCG immediately made a decision on February 2 to nominate Mir Vračar for the first member of the Supervisory Board, and to propose Marina Šljivančanin for the second position, if they get that position depending on the percentage of shareholders present. Then, on February 6, EPCG requested a postponement of the Assembly, so that their candidates would have the opportunity to go through the approval procedure at the Central Bank.
New Assembly if someone resigns
From this state-owned company, they proposed that if the Shareholders' Assembly cannot be held, they should immediately schedule a new one at which its representatives in the bank's management would be elected.
Prva banka stated in their response, which "Vijesti" had access to, that they were unable to postpone the Shareholders' Meeting, and regarding the request to schedule a new one, they announced that the Supervisory Board would decide on it in accordance with the Law on Business Companies and by the Law on Credit Institutions.
According to these laws, the appointment of a new Shareholders' Assembly for the election of new members of the Supervisory Board would be possible only if one of the members of the Supervisory Board who will be elected tomorrow resigns or their mandate is confirmed.
The law stipulates that bank shareholders do not send their candidacies for members of the Supervisory and Management Board directly to the Central Bank for approval, but to the bank, which forwards them to the CBCG.
Aco knew everything in advance
From Prva banka's response, it can be seen that qualifying shareholder Aco Đukanović sent the request to replace his two members of the Supervisory Board to Prva banka on December 29, i.e. the same day when the decision to schedule the Assembly was announced. This means that, unlike EPCG, he was informed in advance of the decision and had prepared candidates and their documentation. The First Bank forwarded the request to the Central Bank on January 5, which gave approval for the appointment of two members on February 2.
According to the new norms of the Law on Credit Institutions, the supervisory board took over most of the powers of the previous board of directors of the bank. He approves the bank's strategies, financial plan and business policy, supervises the management of the bank, appoints auditors, appoints and dismisses members of the bank's management, audit and other formed committees, considers and takes positions on the findings from the Central Bank's report and the reports of other supervisory bodies on the performed control...
A new conflict could trigger the withdrawal of six million euros
The continuation of the conflict between Prva banka and its second largest shareholder and important business partner is not only unusual in banking, but can further complicate the already damaged status of this bank.
On the financial statements of Prva banka for operations in 2022, the auditing firm BDO gave a qualified opinion in May of last year with the assessment that there are "significant uncertainties that cause significant doubt regarding the bank's ability to continue operations", as well as that the continuation of operations will "in the foreseeable future, depend on the support of the bank's shareholders and their plans for recapitalization".
Since 2010, EPCG has had a so-called subordinated loan of six million euros in Prva banka. Banks include this type of loan when calculating capital adequacy and other important parameters for their work, and their withdrawal before the deadline can only be approved by the Central Bank, and only if it would not endanger that bank.
At the beginning of 2022, EPCG requested that Prva banka return this money, because it needs it for announced investment projects.
Prva Bank delayed sending this request to the CBCG. In September 2022, the then governor of the CBCG Radoje Žugić rejects EPCG's request and forbids First Bank to return the money to the state-owned company.
"If Prva Bank were to return a subordinated loan of six million euros to Elektroprivreda, it would no longer meet the minimum regulatory requirements for capital," CBCG announced at the time.
16 years ago, Žugić was the chairman of the Board of Directors of Prva banka, when that bank was saved with a 44 million euro state loan, approved by the Government of Milo Đukanović.
EPCG could now again demand that Prva banka return six million euros to it.
The sale of the bank failed, a new auditor is waiting
At the end of December, Aco Đukanović's attempt to sell the majority of shares in Prva Banka to a Serbian businessman officially failed. Davor Matsuri.
At the end of October last year, the CBCG officially announced that a company from Serbia had submitted a request for the acquisition of a qualified participation of up to 50% (minority participation) in the capital of Prva banka. Obtaining approval from the CBCG is the beginning of the process for concluding a sales agreement.
Because of this sale procedure, the Montenegro Stock Exchange placed Prva banka shares in the observation segment at the end of October due to the announcement of its sale and the prevention of possible speculation with its shares.
Two days ago, the stock exchange removed Prva banka from the observation segment. There is officially no interest in buying the shares of this bank on the stock market, and the last time they were traded at a price of 20,5 euros, while their book value is 127 euros.
The auditor stated in the report for 2022 that he is selling the bank to a buyer who would recapitalize it, one of the solutions for its successful continuation of work.
The new reports of the state auditor at the end of 2023 should be published by June.
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