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Analysis 14 Dec 12

Miskovic Arrest Adds to Serbian Deputy PM’s Lustre

Aleksandar Vucic can expect a ratings boost from the detention of Delta’s powerful boss - but the real test will be the follow-up in the courts.

Gordana Andric
BIRN
Belgrade
Miroslav Miskovic. | Photo by Beta

The arrest of tycoon Miroslav Miskovic is a major coup for Serbia’s governing Progressive Party and its combative leader, Aleksander Vucic, commentators agree.

But while Vucic can claim political credit for the action, the conduct of his trial - if it occurs - will post a major test for the country’s courts.

From leading the list of Serbia’s richest and most powerful people, Miskovic has now ended up in newspapers’ crime sections.

Police detained the owner of Serbia’s biggest private company, Delta Holding, and nine others, on December 12th.

They are suspected of having illegally obtained more that €30 million, Miljko Radisavljevic, Serbia’s prosecutor for organised crime, said.

Suspects include the tycoon’s son, Marko, owner of Mera Investment Fund, and Marko Djuraskovic, owner of the road building company Nibens Group.

Delta responded that it was “absolutely sure of the legality” of its work, adding that the company would cooperate fully with the authorities.

No ordinary company:

Aleksandar Vucic. | Photo by Beta

The fourth biggest company in Serbia, after the state-run electric power firm, the oil company, NIS, and Serbian Telekom, Delta is the country’s biggest private concern.

Employing about 5,000 people, it operates through 76 different subsidiaries, dealing with farming, food production, retail, export-import, representation of foreign companies, consumer goods, car sales, real estate, financial services and insurance.

Aleksandar Vucic, Deputy Prime Minister in charge of corruption and leader of the Serbian Progressive Party, said that the suspects were arrested in relation to 24 privatisation cases that the EU has flagged up as problematic.

He explained that while Miskovic had been arrested in connection with his alleged involvement with Nibens Group, police were probing his role in several other problematic privatisations.

“Two things have been proven in Serbia - that nobody is protected and untouchable and that the state is stronger than any individual,” Vucic said December 12th.

Media reports said that when he was detained, Miskovic told the police that Vucic would not live to take part in a show on the public broadcaster, RTS, scheduled for that evening.

They said they had informed Vucic of the verbal threat and had increased security measures.

Vucic clearly took the threat seriously, writing on Facebook and Twitter: “No one has ever beaten Serbia and neither will Miroslav Miskovic.”

But Delta’s lawyers, the firm Jankovic, Popovic and Miric, said their client had not resisted arrest and denied having made any threats.

Miskovic had “said that “Aleksandar [Vucic] cannot take part in the RTS show unless he arrests me first,’” the firm said.

Jovo Bakic, a political analyst, said Vucic had every right to crow over the tycoon’s arrest.

Both he personally and his Progressive Party stood to benefit, as voters would appreciate their readiness to take on corruption.

“Supporters of their main opponents in the Democratic Party will be asking why the Democrats lacked the political will to do what the Progressives have done now,” he said.

“And from now on Vucic can also count on the sympathy of the intellectuals, which he has never had before in his political career,” Bakic added.

Test for the courts:

Dragana Boljevic. | Photo by Beta

While the affair has strengthened the standing of Progressives, a possible trial of the tycoon will pose a test for the judiciary.

“The arrest of someone believed to be the richest person in the country wouldn’t be easy anywhere in the world,” Dragana Boljevic, president of the Association of Judges, noted.

“And in Serbia, the judiciary is frightened by politicians,” she added.

“High judicial bodies…. had the power to open this and other such cases much earlier, but they never did,” she continued.

If Miskovic does go on trial, it will be crucial to ensure that the court works independently and delivers a decision only on the basis of the presented evidence, she recalled.

“It must be clear that he is set free or convicted only on the base of evidence, not that he is found guilty because the court had to find him guilty, or released because the court was forced to drop the case,” Boljevic said.

Economic impact:

Milan Culibrk. | Photo by Media Centre Belgrade

The arrest of Miskovic meanwhile poses questions about the future of Serbia’s biggest private company.

Miljko Radisavljevic said the prosecution was conducting an investigation into the origins of all of Miskovic’s money in order to ascertain whether some of his assets were gained from crime.

If the allegations are deemed well founded, some of his assets may be seized under the terms of the Law on Seizure and Confiscation of the Proceeds from Crime, which came into force in 2009.

After Miskovic was detained, Delta Holding announced that the company would continue its regular operations in accordance with an approved five-year strategic plan, while the holding will be run by the board of directors.

However, Milan Culibrk, an economic analyst, said he doubted the board of directors could lead the company with the same success as its boss.

Culibrk recalled that Delta Holding’s net debt at the end of 2011 was €350 million, while the company was valued at €973 million, equivalent to three per cent of Serbia’s GDP.

“All the major decision in the company were made by Miskovic himself and it is questionable whether the board is ready to take over his role,” he said.

“It is not the same whether Miskovic or someone from the board is trying to negotiate the reprogramming of a loan, or get a new loan,” Culibrk added.

The company’s ability to repay its loans or take new ones would be crucial to its survival, he noted.

“Thousands of employees are at stake. Delta holding is Serbia’s biggest private company, working with numerous subcontractors. If the company goes down it may well have a negative impact on Serbia’s overall economic growth,” Culibrk continued.

In response to claims that the arrest of Miskovic could have an impact on the ailing economy, Vucic said Delta’s owner could not count on special treatment just because he employees lots of staff.

“I have a counter-question: does this mean that anyone who employs a thousand employees can commit crimes?” Vucic asked rhetorically on the public broadcaster RTS on December 12th.

Milka Forcan, Delta’s former vice president, said the arrest would affect the company’s image and reputation as well as its business dealings.

“But I do not agree with scenarios that it will all collapse like a house of cards,” she told B92.

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