WikiLeaks: Serbian Company “Feeling The Heat Of Economic Crisis”

WikiLeaks: Serbian Company “Feeling The Heat Of Economic Crisis”

WEDNESDAY, 07 SEPTEMBER 2011 14:47

VALERIE HOPKINS
Three of the recently leaked crop of WikiLeaks cables feature Miroslav Miskovic, the wealthiest man in Serbia. Cables written in 2007, 2008, and 2009 request that he never be granted a U.S. visa and detail the illicit means he used to acquire his fortune during the breakup of Yugoslavia. One 2009 cable examines the impact his business conglomerate, Delta Holding, has on the Serbian economy.

The financial well-being of Delta Holding “is a barometer for the financial troubles of Serbian businesses and the economy as a whole,” according to a a 2009 cable from the U.S. Embassy to Serbia sent to Washington.

Analysts predicted that the company, which employs 25,000 and could account for more than 5 percent of Serbia’s GDP would “weather the storm,” given its “size and

quasi-monopolist position in Serbia, but that many of its suppliers and dependent companies were teetering on the cusp of bankruptcy because of outstanding payments from Delta.

Delta Holding has property all over southeastern Europe, including one of the Balkans’ biggest malls. According to the cable, “speculation about Delta's debt ranges up to $930 million, with $266 million of that coming up for repayment this year. In addition, Delta has outstanding accounts payable with a number of its suppliers, which may put Delta's total debt close to the $1.3 billion mark.”

The cable reports that Miskovic asked the Serbian government for a financial assistance package worth $665 million for his enterprise. When the government proposed a stake in the company, Delta withdrew the request.

However, the American diplomats who wrote the cable admit that some with access to the company’s financial details described it as stable, despite negative public perception. Several American equity firms met with Delta executives to explore investment opportunities. The firms, given access to the company’s financial records, reported to the embassy that “Delta was a financially solid company, but they were concerned about Miskovic's controversial image.”

Miskovic’s base is in Serbia, but he owns companies and property in Bulgaria, Bosnia and Herzeogovina, Cyprus, Macedonia, and Montenegro, as reported in the OCCRP’s extensive investigation of his business activities.

In another unredacted cable dated July 27, 2007, officials at the Belgrade embassy advocated that the businessman be barred from ever receiving a non-immigrant visa to America.

Their reasoning was that new material received that shows “proof positive of Miroslav Miskovic's direct benefit from official corruption on the part of then-Customs Director Mihalj Kertes.” Kertes, at that time, had been indicted for corruption and convicted of providing trucks to assassins of opposition politicians.

This evidence came in the form of letters from Carla del Ponte, former chief prosecutor of the International Criminal Tribunal for the Former Yugoslavia, who shared them with a Serbian investigative reporter. Del Ponte, according to the cable, “has amassed literally tons of documentation highlighting official corruption during the Milosevic regime as part of her (now defunct) case against the former dictator.”

One document was a decision printed and sealed with official Customs Administration insignia signed by Kertes giving Delta Holding and its subsidiaries allowances for special treatment for the importation of its goods. Essentially, Delta was given dispensation to clear its goods in Belgrade’s custom house rather than at the border, and the company was allowed 45 days to pay customs and fees normally due on the spot in cash.

A high-level Customs House official whose name the U.S. Embassy sought to protect in the cable told the Embassy that allowing Miskovic to unload in Belgrade, “gave the tycoon an unfair market advantage over potential competitors who had to unload at the border and truck their goods in themselves.”

Additionally, “ the document allowed Miskovic to keep his goods in storage in customs, clearing them piecemeal only when market demand was right,” which gave him unfair advantage and “allowed him to benefit from hyperinflation as goods sold much later on were valued at their invoice amount from the date of entry.”

What the embassy deemed “most damning” was that Miskovic was allowed to clear

goods through customs only on the “promise” that the company would pay duties within the allotted 45 days. The informant said since bank guarantees had no value at the time, and he said, “whatever customs fees paid by Delta were paid after 45 days of hyperinflation had cut into the bill… if Delta paid at all! Since Delta was allowed to clear goods with just this document, many customs bills went unpaid.”

Embassy officials said Miskovic deserved similar treatment as Kertes and reinforced their recommendation that he be barred from receiving a U.S. non-immigrant visa in the future:

“Miskovic's partner in crime, Mihalj Kertes, is already a confirmed purveyor of corruption and is once again under indictment in Serbia specifically on the basis of this report. We think it only fitting that Miskovic, at the very least, be treated similarly by our consular system, so that he does not derive the further benefit of access to the U.S. from his pillaging of Serbia.”

A third cable about Miskovic, dated April 4, 2008, details Delta Holding’s purchase of Belgrade real estate at a privatization auction. Embassy officials did not provide conclusive evidence of foul play, despite the fact that “Miskovic bought Genex property in New Belgrade for $3,200 per square meter although the current going price for residential and business apartments in the area is $4,600 per square meter.”

Cable authors wrote that “despite the fact that Miskovic's winning bid came at a public auction against a bitter rival, Miskovic's persona creates speculation that there was some type of fixed deal involved.”

They said Miskovic’s reputation is one reason he has been courting American and British businesses as partners:

“Miskovic and other controversial tycoons continue to seek out international investors for capital as well as for the legitimacy they bring. Miskovic has met with three potential U.S. investment partners in the past couple of months and told two of them that he has a goal of listing his firm, Delta, on the London Stock Exchange. That goal may require Miskovic to adjust some of his aggressive business practices and confront his image as a monopolist and dirty dealer.”

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