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Kosovo Landmark Privatisation Under Investigation

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Kosovo Landmark Privatisation Under Investigation Opinion: Dragan and Agnesa don’t get Edita and Borko January 13 - 19, 2012 Issue No. 79 www.prishtinainsight.com Price € 1 NEWS Hidden Fears for Life of Yugoslav Kosovo's Flying Lobbyist Technology > page 3 'Sent America NEWS to Space' Albanians Urged to According Join Kosovo to Film Border Protest New documentary claims > page 4 that late Yugoslav presi- dent Josip Broz Tito built NEIGHBOURHOOD ‘Sanaderization’ the biggest secret under- Spreads to ground space centre in Montenegro Europe. See Page 3 > page 8 FEATURE Kosovo Landmark Privatisation Kosovo Turns Under Investigation Back the A widely praised sale in 2010 of a cement factory is now under the spotlight following auditors’ complaints over the sale Clocks price and allegations of favouritism. > page 11 Kosovo’s privatisation agency, PAK directly negotiated with Titan explained that this was impossible By Lulzim Ahmeti PAK, sold SharrCem, based in Hani was well below the market value of while the current investigation was FEATURE i Elezit, on the border with the cement factory. in progress. he sale in 2010 of Kosovo’s Macedonia, to the Greek firm Titan Prishtina Insight has also discov- “The overall documentation sup- state-owned cement factory, The Changing Face of Cement for 30 million euros in ered that Titan immediately dis- porting the findings presented in the Tlauded as a great success December 2010 missed 80 employees who were not audit report of the Privatization Yugoslav Journalism story for Kosovo, is under investiga- In February that year Titan took working, claiming disability, and Fund for the privatization of the tion by prosecutors, it has emerged. over the lease from a Swiss company, who were then receiving 60 per cent SharrCem plant is currently at the > page 15 Auditors claim that the cement Holcim, which had been operating of their salary. disposal of the State Prosecutor in factory, SharrCem, was sold for the plant since 2000. The company argues that these an investigation on the matter,” below its market value in a process In December, PAK then decided to individuals were no longer employ- Olofsson wrote. that was biased and opaque. sell the facility. At the same time it ees of the plant. “Potential access to such docu- The Auditor General confirmed to invoked a clause in the lease, which it Prishtina Insight had requested mentation before the completion Kosovo’s only English-language Prishtina Insight that it had passed had refused to use for Holcim, allow- access to the Auditor General’s doc- of the investigation may have an newspaper is available: its evidence to the State Prosecutor, ing the new lessee, Titan, to buy the uments on the sale of SharrCem. impact on the proceedings of the who said the case was being investi- plant without it going to tender. But in a letter to this newspaper, investigation,” he added. Delivered to gated. Auditors believe the price that Auditor General Lage Olofsson continues page 2 Your Door Happy New Year Thousands of Peja Beers From Newsstands across Kosovo Prishtina Insight wishes you all a Confiscated in UK happy New Year! We’re starting 2012 Germany-based Kelmendi GmbH has Sent To lost its battle with British customs to Your Inbox with two issues in quick succession: retrieve 13,000 litres of Kosovo’s best- this one, and one next week, before known beer that were seized in October 2009, Prishtina Insight has discovered. From returning to our usual fortnightly The company took their appeal to a tri- our partners timetable in February. bunal in London to have the confiscation business overturned in the summer... page 7 see page 16 for more info is supported by: 2 January 13 - 19, 2012 news Kosovo Landmark Privatisation Faces Probe from page 1 tract,” Capussela wrote in a letter to mentation was available to the the Auditor General seen by this news- Auditor general.” Liridona Kozmaqi, spokesperson paper. He also dismissed the claim of for the State Prosecutor, confirmed In response, Capussela writes, PAK the Mayor of Hani i Elezit that that the case is being looked at but told Holcim that the “right-to-buy” SharrCem was generating around declined to say more. clause did not imply the lessee would 20 million euro profit a year. The mayor of Hani i Elezit, Rufki be allowed to negotiate a price directly “For the previous five or six years Suma, an opponent of the sale, con- with the agency but that it would be in a row the company had operated firmed that he had been contacted allowed to match the best offer in an with a deficit because it was then in by law enforcement investigators open tender. the process of revitalization,” said regarding the privatisation. This position, however, changed Mitsou. “In the last two years it Emmanuel Mitsou, SharrCem’s abruptly following Titan’s acquisition made a profit, but it was less than 20 general manager, said he was not of the lease. million a year.” aware that SharrCem was under Capussela also argued that PAK investigation. Transparency questioned: was right to offer Titan the “right to “It seems strange because the The Auditor General’s report on buy”, guaranteed by its contract. prosecutor is supposed to the Privatisation Agency, published announce such a fact,” Mitsou told in the summer of 2011, suggested Doubts in the municipality: try experts appointed by the issued on December 9, 2010, seen by Prishtina Insight. that PAK had been biased in its Mayor of Hanit i Elezit Rufki European Commission, representa- this newspaper: “Termination of “I don’t know when the investi- award of the contract to a team of Suma recalled to Prishtina Insight tives of SharrCem and senior offi- employment is a result of the sales of gations started and why. I will ask experts to negotiate the sale – the that the municipality had objected to cials of the PAK. assets. This letter is a formal notice our lawyers to look into this.” transaction advisors – and showed the sale of SharrCem from the start. “Taking into account economic that your employment is terminated bias once again during the actual He added that he agreed with the realities… PAK reached the conclu- with immediate effect. Sale lauded: sale to Titan. auditor that the sale price offered by sion that the sale through this “Claims including unsettled pay- Holcim leased SharrCem factory in PAK cancelled a competitive ten- Titan was not a fair one. method to the lessee would create ments due according to the employ- 2000 for ten years but six months before der for the post of transaction advi- “The municipality has filed a law- more opportunities to reach a price ment contract shall remain the its contract expired, the lease of the sors. Instead it invited five compa- suit against PAK in the Supreme reflecting a fair market value and employer’s liabilities,” the letter company was bought by Titan. nies to bid for the job and finally Court. It has been there a year but would also enable negotiations in reads. The Greek cement giant that took selected Raiffeisen Investment, we haven’t received any opinion other areas, such as the number of “Such claims shall be reviewed over the final months of the lease then with a price of 580,000 euro. other than that the lawsuit has been retained employees, investments, according to the liquidation proce- bought the plant for 30.1 million euro in “We conclude that the transac- received,” he added. and environment protection,” said dures and you will be contacted when December 2010. tion advisor selection procedures He said Hani i Elezit was not Kaloshi. such procedures shall commence,” it According to mayor Suma, this fig- were not transparent,” said the against the buyer, Titan, but was “PAK’s board of directors, in line continues. ure was suspect as the company was auditor. “We noticed that PAK pre- against the form and the manner in with the international best prac- The letter was signed by Muharrem generating an annual profit in excess ferred the winning company from which the company was sold. tices, contracted a transaction advi- Arifi, director of the Liquidation of 20 million euro. the beginning.” “We objected and still object to sor to make an evaluation of the Department at PAK, and by Zeqirja The chair of the board of PAK, Dino The auditor also suggested that this form of privatisation because enterprise, always having in mind Morina, head of the regional office of Asanaj, at the time described the sale PAK had not respected the proce- SharrCem was sold without a ten- the protection of assets and increas- the agency in Gjilan. as the “largest and most successful pri- dures for the privatisation of der,” he explained. ing their value.” Mayor Rufki Suma said that only a vatization in Kosovo. SharrCem when it negotiated “The price it was sold for is too Kaloshi said that when analysing few days after arriving, Titan termi- “The new buyer has also assumed a directly with the buyer, Titan. low and doesn’t correspond with the the parameters of the sales price, nated contracts of more than 80 commitment to pay present value com- “Based on what was seen, we can value of the company,” he added. the subjects taken into account employees who were not then work- pensation for employees under the say the PAK did not ensure an open According to him, preliminary included employment, productivity ing but receiving 60 per cent of their social scheme,” he noted. market price in the sale of the evaluations suggest that the value of development and environmental salaries.
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