Hotel company "Fjord" from Kotor, majority owned by the company "Alpha Invest" Veselin Barović i Damjan Hosta, made a business loss of 235 thousand euros last year, while the auditor received a qualified opinion, drawing attention to the fact that the company's deposits are used as collateral for cash loans from Veselin and Oliver Barović in the amount of 300 thousand euros without interest and income for the company.
The company had an accumulated loss of five million euros at the end of last year. Last year, they had total revenue of 3,8 million euros, 130 thousand more than the year before, but operating expenses were more than four million.
The auditor “draws attention” when there is some information or business, which may not be illegal but has an impact on the company’s operations. Here it is indicated that “the company’s term deposits in the total amount of 300.000 euros are used as collateral for the loan approved by Hipotekarna Banka to Barović Olivera and Barović Veselin.” Olivera is Veselin’s daughter.
It is not uncommon for owners to use their companies as guarantors or their deposits as collateral for their personal loans, thus extracting money from them without paying corporate income tax.
The owner would receive money from the company in the course of regular business operations through the realized profit and payment of dividends taxed at 15 percent. However, in this case, the majority owner is the company “Alpha Invest” whose account has been blocked since April 2017, or almost nine and a half years. The current debt under the blockade is six thousand euros.
That is, even if the company were to operate positively, Barović and Hosta, as owners, would first have to pay tax on the dividend, unblock their company, and then withdraw the profit, if any.
In March 2021, Olivera Barović made a deposit of 150 thousand euros with Hipotekarna Banka for the loan, which is reportedly interest-free until May 2028. In other words, the company, which is a chronic loss-maker, blocked this much money for seven years without any interest income on that basis. This money is collateral for the loan for Olivera Barović.
In January 2023, an amount of 100.000 thousand euros was deposited, interest-free, for the period until April 2026, as collateral for a loan for Olivera Barović.
In June last year, an amount of 50.000 euros was pledged with the same bank, also interest-free for the period until September 2030. It is used as collateral for a loan from Veselin Barović.
So the company has no return on the 300.000 euro pledge, and is risking that amount if the Barovićs do not repay the loans taken.
The auditor issues a qualified opinion when the balance sheets are incorrectly recorded or when some receivables or liabilities are overstated or understated. This measure was issued here due to a dispute with a natural person who was supposed to carry out certain construction works at the company's "Vardar" hotel, but did not do so, and a lawsuit of 94 thousand euros was initiated. The auditor believes that these receivables are overstated.
HP “Fjord” was founded in 1968 as a carrier of the development of tourism and hospitality capacities in Kotor. During the mass voucher privatization and after it in 2002, “Alpha Invest” became the owner of 94 percent of the shares in HP “Fjord”.
The company operated the hotel of the same name, the largest in Kotor, until 2005, which was demolished in 2018 after being privatized by the Irish company “New Fjord Developments”. The company had several restaurants, camps and real estate in the Kotor municipality, which were sold in recent years. The company now operates the hotel “Vardar”, the restaurant “Galion”, the café “Dojmi”, as well as the restaurant and beach bar “Bajova kula”.
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