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Anti-Corruption Council on Jugoremedija

The Anti-Corruption Council adressed to the Government in connection with the pressure of the executive power on the Jugoremedija

July 27, 2011

The Anti-Corruption Council adressed to the Government in connection with the continuous pressure of the executive power exerted on the Zrenjanin pharmaceutical factory Jugoremedija, with the aim of removing from the office the management elected by the votes of its majority private owners, so that the Ministry of Economy could install its own management in this company, where the state is a minority shareholder, and a shareholder without the voting right to elect management members, in light of Article 11b of the Law on the Privatization Agency.

After the court had established the violation of the law in the sale of Jugoremedija shares in 2006 and deleted the contracts between Jaka 80 and the Shares Fund, it was necessary that the collusion between the officials from the state institutions and the criminal circles be investigated, the liability for the violation of the law established, and that the state, in agreement with the private shareholders, initiate proceedings for compensation of damage caused to the factory by unlawful actions of the responsible persons at the responsible state agencies. Instead of that, the executive power continued exerting pressure on Jugoremedija private shareholders and the management appointed by them.

The present situation at Jugoremedija does not differ at all from the situation in 2002, when the Shares Fund imposed Jovica Stefanovic’s management on the majority shareholders. It is indispensable that the Government examine this case and urgently take necessary measures, the more so because in 2006, after the court had cancelled the contracts for sale of Jugoremedija shares and its capital increase, it failed to initiate proceedings for the establishment of the liability for the violation of the law and the caused damage, which enabled that the violation of the ownership rights of the private shareholders be continued to date.

The worrying conclusion can be inferred from the actions of the Ministry of Economy and the Ministry of Interior at Jugoremedija that in case of companies where the state is a co-owner, its representatives abuse the fact that they are at the same time a part of the executive power, using their position to exert pressure on private owners. At Jugoremedija such pressure has gone so far that business decisions made at the Shareholders’ Meetings and the Management Board in accordance with the law have become the subject of a constant police investigation. At the same time, this investigation does not cover all the members of the management bodies where such decisions were made; rather, they are exclusively directed at prominent business officials, which paralyzes the business operation of the company and discredits its business reputation to such an extent that it jeopardizes its survival. Therefore, it is very important that the Government establish the background of this constant pressure.

Specifically, considering the fact that in 2006 it failed to investigate the existence of the collusion between the executive power and the criminal circles which enabled suspicious capital to control a pharmaceutical factory for four and half years, and especially considering the fact that the relation of the state representatives towards the private owners of Jugoremedija has not changed even after the court decisions of 2006, a conclusion can be inferred that the collusion between the executive power and the criminals has effectively remained intact. Moreover, it can be concluded that only owing to the pressure of this collusion, the Government has not taken any action in the meantime to provide equal protection of the ownership rights of all the owners and the security of contracts, which are the basic preconditions for the development of the economy and which are the basic tasks of the Government. Therefore, the Government must establish who is behind these pressures whose aim is the removal of the company’s management elected legally by the votes of the private shareholders. What is behind these actions of the state agencies which discredit the reputation of Jugoremedija and cause damage to the private shareholders and to the state? What interests motivated the state secretary at the Ministry of Economy when he presented untrue information about the situation at the company and falsely presented the private shareholders of Jugoremedija as its workers?

The professional and wider national public and the European Commission share the same attitude that curbing the collusion between the executive power and criminal circles is the most important issue in combating corruption in Serbia, which makes it indispensable that the Government examine in detail the drastic violation of the elementary rights of the private owners of Jugoremedija and inform the public of its findings within the shortest possible time. As the problem at Jugoremedija is manifested in a very dangerous way, because it threatens to fully destroy this factory with a majority private ownership, whose products are at the same time of strategic importance for Serbia, the Anti-corruption Council is going to submit all the documentation it has at its disposal to the Republic Public Prosecutor’s Office for the purpose of the initiation of an investigation and shedding light on all the circumstances in connection with this drastic case of systemic corruption which has already been going on for almost ten years.