Investigation: Mystery Hangs Over Death of Yugoslavia’s Flagship Paper

Ivan Radovanic officially launches Borba in December 2008| Photo: Media Centre Belgrade

Two years after the revived daily Borba raised hopes of a new independent voice entering Serbia’s media stage, the newspaper is closed, the journalists it lured are disillusioned and the newspaper’s true ownership is shrouded in offshore paperwork and mystery.

The venerable name survives only in court documents in which various ex-employees are suing their former owner for back pay and expenses.

The newspaper, whose last owner Ivan Radovanovic, published some strong stories and created a buzz in the media during a 13-month run, printed its last copies in October 2009. It halted its online edition that December.  

But it was plagued from the start by late payments to staff, financial shortfalls and questionable business practices. These included making large payments to printers in cash – in apparent violation of Serbian law, which obliges companies to carry out all transactions via traceable bank transfers.

“I’d prefer to forget the whole story but I remember it every time I pay the rent,” says Milos Jevtovic, whom Radovanovic recruited as editor but who never received more than a few pay cheques.
 
Jevtovic said he had such faith in the potential success of the business venture that he took out a new mortgage, which he then could not pay for – losing his property in consequence.

He says he is owed thousands of euros:  “We all thought we had the right man for the right story while in fact we were all used,” he says.

Radovanovic’s tenure was marked also by talk that he was acting as a front man for the newspaper’s fugitive former owner, Stanko “Cane’’ Subotic.  

On May 15, 2009, Belgrade mayor Dagan Djilas, who comes from the ranks of Serbia’s ruling Democratic Party, publicly repeated this charge in a heated exchange with a Borba reporter.

Radovanovic denies the allegation, maintaining that he paid less than a thousand euros to buy the entire operation from Subotic.

Business records obtained by Balkan Insight show the purchase price was listed at 5,000 euros.

The same records indicate that Subotic may have retained ties to Borba after the sale.

Thomas Nigg, Subotic’s lawyer and a trustee of Subotic’s holding company, which controlled Borba, is listed also as a trustee of Radovanovic’s Cyprus holding company.

This is still listed as the owner of Borba, according to business registry records in Cyprus, Denmark and Liechtenstein, obtained by Balkan Insight.

These records show that Radovanovic set up a complex structure of offshore companies in Liechtenstein and Cyprus when he completed his purchase of the company, making it difficult to track the actual ownership of Borba.

In an interview with Balkan Insight, Radovanovic says his lawyers handled the offshore transactions and he never asked them why such an intricate scheme was needed.

He insists this intentions in buying Borba were benign and he blamed Serbia’s poor economy and acts of sabotage by Djilas, Mladjan Dinkic, leader of a junior ruling G17 Plus party, and others in the Democrat-led coalition for the project’s failure. “My problem was the Serbian state - politics,” he said.

He claims that after preparing a pilot issue to show to clients and investors, a director of a state company that advertised in the issue complained to him of having been summoned by a member of the cabinet of President Boris Tadic, the Democratic Party leader.
 
The director said he had been reprimanded for giving advertising to Borba. Radovanovic declined to name either person.

Employees and former marketing directors of Borba dispute his analysis of the reasons behind the company’s failure.

They say Radovanovic never had the financing or the business acumen to make the venture work while advertisers shunned the new venture, which never printed more than a few thousand copies.

Ivan Radovanovic | Photo: Media Centre Belgrade

Within months of taking ownership, Borba’s bank account was blocked because of debts, and the editor started paying employees and vendors in cash. Radovanovic admits doing so to Balkan Insight.

Vlada Markovic, head of marketing between the period that Radovanovic came aboard and February 2009, says things could have been different.

“Borba was an excellent idea, great quality, original and new,” he says, “but everything failed because circumstances did not favour Radovanovic… and because Radovanovic did … not know anything about management and publishing.

“He did not provide enough money, so the idea of such a paper was not grounded in reality,” Markovic adds.

Whatever the real reason for Borba’s failure, the newspaper’s former employees have taken the hardest hit. About 30 long-time staff inherited by Radovanovic lost pensions and other benefits and were rarely paid.

“As long as we don’t have it in writing in our employment record that our employment [with Borba] is terminated, we are still locked in the same story,” former reporter Vukan Simonovic says.

“That is why I don’t have health insurance and my pension insurance hasn’t been paid at all since 2008.”

Most of the ten other journalists that Radovanovic lured to run the operation are now unemployed and in debt. Some are unable to access state benefits because they are still officially listed as working for the company.

A post-Yugoslav struggle:

Borba [“Struggle”] was one of the oldest newspapers in Serbia, dating back almost 80 years. Widely seen as representing a Yugoslav brand, during the Communist era Borba’s publishing house was a powerful enterprise.

Besides running a daily newspaper, the company portfolio included numerous weekly political and entertainment magazines, selling hundreds of thousands of copies across former Yugoslavia.

The company had its own distribution network and printing house and a high-priced office in central Belgrade.

Shortly after the collapse of the Yugoslav federation, in 1992, Borba became a stockholder company in which Dusan Mijic and his company, Finagra, controlled 42 per cent of the shares.

But Serbia’s then ruler, Slobodan Milosevic, and his associates claimed the registration had not been carried out properly.

They inserted their own associates, headed by Dragutin Brcin, into Borba, thereby splitting the staff into two factions – one with the government, one against.

The anti-government faction proceeded to set up their own newspaper, named Nasa [“Our”] Borba, which operated until 1997, when new laws passed by the Milosevic regime made it illegal for the newspaper to print anti-government information.

Afterwards, the staff of Nasa Borba took on a new name, Danas [“Today”]. This still exists in Serbia as a daily.

The original publishing house changed hands several times throughout the late 1990s, incorporating companies such as Revijalna Stampa, Stamparija Borba, NIP Ekonomska Politika and, in March, 2000, Vecernje Novosti.

A year later, following the fall of the Milosevic regime, the government ordered Borba to return to its original form. Subotic then stepped in, taking over the distribution network and the daily.

Subotic was indicted in 2007 and charged with abuse of official position. He fled to Switzerland, where he remains, in spite of being on an Interpol wanted list.

Stanko Subotic | Photo: stankosubotic.net

Subotic insists he is a victim of persecution by the Serbian government, composed of Tadic’s Democrats, the Socialists and the pro-EU, pro-business G17 Plus.

In a letter sent to prosecutors after his indictment, Subotic explained the circumstances surrounding his purchase of Borba in 2002.

“The government announced that it was ready to sell the Borba Publishing House, so I made contract with representatives of [German publishing company] WAZ to jointly take part in the project, and buy the daily Vecernje Novosti on their behalf.

“I was primarily interested in the distribution network,” he added.

But under Subotic, the daily Borba barely survived, printing no more than several hundred copies a day. Monthly revenues never exceeded 30,000 euros, according to business records.

Radovanovic says this was when he got the idea to buy Borba himself, seeing it as a great business opportunity and a chance to return to his old journalistic roots. “I was still attracted to journalism, it was like a passion,’’ Radovanovic told Balkan Insight.

His public relations firm, ICP, was then expanding “and it was natural to enter the print business,” he adds.

As Borba was then 200,000 euros in debt, “the price was ridiculously small,” he continues.

In 2008, according to Serbian Business Registry records, Buana Holding Limited, founded in Cyprus, bought Borba from Futura Plus, owned by Subotic. Liechtenstein records also list Radovanovic as the owner of Buana.

Documents in Liechtenstein and Denmark, obtained by Balkan Insight, show Buana is managed by a trust founded and run by Thomas Nigg, Subotic’s lawyer.

Nigg is also director of Emerging Markets Investments Asp, through which Subotic runs Futura Plus and other companies.  

Asked why he opted for this complex offshore ownership, Radovanovic says he “wanted to move the whole story of Borba as far away from Belgrade as possible... and from the possibility of someone putting pressure on him in Belgrade.

“I hired lawyers to create a company in Cyprus and then the lawyers from Belgrade hired lawyers from Liechtenstein,” he adds. “I only know that I pay the lawyers in Liechtenstein a monthly amount for the service,” he continues.

Radovanovic insists that Subotic played no role in the company.

“It would not have been logical for ‘Cane’ to sell me his newspaper only to become owner of the same newspaper,” he says. “This is conspiracy theory - but there is no conspiracy there.”

Rebirth was brief:

When Radovanovic obtained control of the newspaper, he gained little else. Subotic and Futura Plus retained control of distribution.

He inherited about 30 workers from the old Borba and hired another 10 journalists and editors, offering top salaries to attract talent, he and ex-employees recall.

Milos Jevtovic left his job at the TANJUG news service to become the editor.

His promised salary of 1,500 euros a month was double his existing pay but he maintains that the professional challenge cemented the deal rather than the promised pay cheque.

“The concept was to have something resembling a mix between the Italian Repubblica and a Swiss paper,” he says.

“There would be no daily news, just analysis, explaining the causes and consequences of certain events. It sounded like an extremely good idea.’’

But financial problems soon multiplied. Radovanovic had to shop around for someone to print his newspaper. Established printing companies, such as Politika, wanted far too much money, he says, and nobody would let him operate on credit. They wanted money up front.

“That was a hell of a business, as the printing houses were demanding the impossible,” he told Balkan Insight.

“I finally found a printing house but I had to pay them 50,000 euros in cash,” he adds. “No printing house would let me pay with delays. That kind of problem dogged us from start to finish.’’

Grafo Produkt, of Novi Sad, did extend credit but when the company was not paid on time, it filed to block Borba’s account, Ljiljana Boskovic, Borba’s former marketing director, recalls. After that, they had to pay everything in cash.

Most employees at Borba believed Radovanovic had plenty of cash before the start-up, which was coming from Subotic, presumably seeking to use the newspaper to clear his name. But the money was nowhere to be seen.

Almost immediately, Radovanovic started skipping payments to his staff. “Nothing was paid to Borba’s account from Cyprus [Buana Holdings’ HQ],” Goca Danicic, who ran Borba’s finances, recalls. “The money that Radovanovic promised, which he was going abroad to fetch, never arrived.”

In April 2009, after Radovanovic told the staff he was out of money, he says they offered to keep working without any guarantees.

Radovanovic claims he spent several hundred thousand euros of his own money on the firm and did not take cash from Subotic or anyone else.  

“It was my own, personal money, around 300,000 euros. All the money spent on Borba was my own. All of it cash,” he told Balkan Insight.

Radovanovic portrays himself as a martyr to his journalistic principles.

In an open letter published on November 5, 2010, he claimed that Dinkic, Djilas and other members of the Serbian establishment had gone after him because Borba had threatened their power.

“When they heard that somebody was starting up a newspaper and they hadn’t previously made a deal with him, they became paranoid,” he said, of Dinkic and Djilas.

“The main task of the ruling elite is to control the media,” he added. “Who are the owners of the media? The state controls the media through tycoons,” he added.

But employees describe Borba as being poorly run under Radovanovic. “I arrived on February 2 and only found out later that I was head of marketing,” Ljiljana Boskovic says.

“I was paid only one minimum salary for February – in July,” she adds.

She dismisses claims that politicians or advertisers put pressure on them. “I don’t think the paper was ruined because of Djilas and the others but because of the way the business was run,” she says.

Despite the lack of pay and the constant hunts for money, the journalists remained determined to put out a good product.

Even when the utilities were shut off because Borba had not paid its electricity bills, reporters continued working in the newsroom for several months after Radovanovic himself had left, until the December cold forced them to shut.

Today, many ex-reporters like Vukan Simonovic are owed months of salary. Jevtovic filed a lawsuit and won but has yet to receive any of the money.

Radovanovic says they will never get any money from him because he is also a victim. “The employees are now suing Borba for their lost salaries but they can’t get the money, just as I can’t get it,” he says.

“I don’t have any personal financial obligations [to them], they are the company’s obligations, and the company’s account is blocked…” he adds.

 “What we had, we shared, I didn’t get anything, just gave,’’ he continues. “I always told them there was a big chance this would not work and they could leave or stay.”

Gordana Igric contributed to this investigation.