The Technical Government is obliged to inform the citizens who are the ultimate owners of the company Northstar, which is behind the project to build a tourist complex on the Hercegovina part of the Luštica peninsula, the Action for Social Justice (ASP) announced.
In that non-governmental organization, they believe that the Government should also announce under what conditions the investor proposed to terminate the lease contract for the construction of the tourist complex, which he was unable to actually start even 13 years after signing the contract.
"Instead of citizens witnessing the "crocodile tears" of certain government officials for alleged reputable investors, it is more necessary for taxpayers to clearly communicate the conditions of the proposed termination of the long-term lease agreement, primarily whether the foreign investor is seeking compensation and how much, but also who are its ultimate owners. for years hidden behind off shore zones or later investment funds," the NGO said in a statement.
According to their opinion, it is necessary to announce whether the foreign tenant/investor may be seeking compensation for lost profits, even though non-fulfillment of obligations on his part should by no means give him the right to do so, and whether the Government will inform the Special State Prosecutor's Office about this matter. , which is extremely poorly contracted for the state and the overall public interest, because the investor is favored by numerous provisions and procedures.
The signing of the contract on the long-term lease of over half a million square meters on the Herzegovinian part of the Luštica peninsula in the fall of 2009, was signed by then Deputy Prime Minister Igor Lukšić. The land was leased for up to 90 years, for the purpose of building an exclusive tourist complex and investing at least 210 million euros.
"The contract was subsequently amended twice with annexes with the approval of the Assembly, and at the time when the Democratic Party of Socialists and its allies had the majority, and the scope of the minimum investment was reduced to 80 million," ASP said.
The contract defined construction in two phases, the location was determined as a private area, and it was stipulated that certain preconditions had to be met, whereby the government of the time guaranteed the investor even some rights for which there was no legal basis in the laws of the time.
The government also obliged the Municipality of Herceg Novi to build an access road to the border of the location, thus the development of a local self-government is predicated on the interests of a private investor. In this regard, it should be noted that in the tender offer, the selected investor expressed his willingness to participate in the financing of the construction of the road to the site as soon as possible, but such a provision was not later found in the concluded contract.
In the meantime, the planning document for the area was changed at least once, in 2014, but essentially there were no specific changes in it, so one gets the impression that this move was resorted to in order to give the foreign investor time to start investing, because he clearly had a problem with the provision of finances for the construction of a tourist complex, or simply obtained a lease agreement for a tourist resort, which later wanted to be resold and thus earn money.
"It should also be noted that in the tender offer, the selected investor submitted a statement that he is able to collect more than 400 million dollars of founding capital and over 300 million dollars of loan funds, for the investment activities of related companies in Southeast Europe. So, the statement was submitted , not the bank's confirmation of the provided financial means and/or the bank's guarantee," the announcement states.
Furthermore, the underestimated amount of the fixed concession fee in the first 30 years of a paltry 77 cents per square meter of land, which is literally on the foam of the sea, the subsequent exemption from paying VAT on the rent, the right of the foreign investor to pledge the rights of the contract to provide finance for the construction of a tourist project, enabling the sale of villas together with the land (even though it is a lease agreement), whereby the Government would receive a ridiculous 55 euros per square meter of land sold, the absence of an anti-corruption clause in the contract are just some of the favorable and/or harmful provisions.
"The terms of termination themselves are not defined precisely enough, especially when the Government violates material violations of the contract, the contract is of a business nature, the Government expressly waives all rights of state immunity against any contractual claim, and the curiosity is that the event of force majeure was also defined as a global economic crisis, as a result of which there was a systemic disappearance or blockage of the operations of the global banking market," ASP said.
The company Northstar was founded in 2007 in Podgorica by Finnish citizen Kari Haataja, by June 2013 the founding capital was increased to less than one million euros, and in the same year he founded Montrose Development BV in the Netherlands with ten thousand euros, which is registered as the founder of Northstar. At the beginning of the following year, Montrose Partners International ltd, registered in the off shore zone of the British Virgin Islands, appears as the founder, which hides the owners.
At the beginning of 2016, Haataja was replaced in the Dutch company by Mohammed Al Sager, who became the CEO of Northstar, and later Imad Mahmud replaced him. Available information indicates that Al Sager is the head of an investment fund from Kuwait.
By the way, one of the members of the consortium, which participated as the only bidder in the tender for Luštica, was Equest Capital Limited, registered in the Channel Islands, as a zone of large tax benefits and unknown ownership. It ceased to exist in 2013.
Until the middle of 2020, Northstar claimed to have invested about 21,5 million in Luštica, but the structure of the investments is not known, especially whether it includes leases and earnings, which by their nature are not real investments. Since the founding capital was less than one million euros by then, it is clear that the financing of the investment was not planned, while the cash flows for the realization of the tourist project are not known.
ASP called on the Government, even the minority in the technical mandate, and elected in an unconstitutional manner, to disclose all information about this project and to inform the Special State Prosecutor of the entire contractual arrangement.
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