BOKSITI CASE – ANOTHER SUSPICIOUS TRANSACTION BY JOVANIĆ AND BANKRUPTCY TRUSTEE: Milović buys the mining company’s property for a pittance only to sell it to Lidl for millions

In just six months, the Nikšić businessman earned over a million euros from the sale of the administration building and land of the former mining giant, which was almost handed over to him as a gift by the bankruptcy trustee. Workers filed a criminal complaint, but there is no money to pay the outstanding salaries 

By Biljana Matijašević

The Nikšić-based company Roaming Montenegro, which purchased the administration building and land of bauxite mining company Boksiti from bankruptcy for 872,000 euros, sold that property to the German retail chain Lidl for around two million euros just a few months later, CIN-CG has learned.

Roaming Montenegro, owned by businessman Dalibor Milović, bought the Boksiti administration building covering an area of 1,652 square metres and the yard and building plots totalling about 5.9 thousand square metres at the end of 2021. Along with its plots nearby (around 2.7 thousand square metres), Milović sold the Boksiti property to Lidl in July 2022 for a total of 2.4 million euros, or at a price of 278.42 euros per square metre, according to the sales contract seen by CIN-CG.

This would mean that, excluding Milović’s plots, the Nikšić-based businessman received around two million euros for the Boksiti property, nearly two and a half times more than what he had paid. In other words, he earned over a million in just six months with this transaction.

The contract also states that the total price was reduced for costs related to meeting the requirements for the handover of the property.

Roaming Montenegro is registered as a company engaged in non-specialized wholesale trade, but it has expanded its business to include construction projects. In 2019, the company won a contract for the reconstruction of the Municipality building in Nikšić. A year earlier, it was awarded a contract for the construction of a building for employees of the Podgorica Waterworks on Stanko Radonjić Boulevard.

The company gained public attention in 2018 when around 1.6 million euros were fraudulently withdrawn from its business account by an organized group based on falsified documentation.

Milović signed a contract worth nearly 1.8 million euros with representatives of the former government in October last year for the renovation of five healthcare facilities in Montenegro.

At the time of the sale of the administrative building, Blažo Jovanić was at the helm of the Commercial Court. Jovanić is currently on trial on charges brought by the Special State Prosecutor’s Office for criminal association and malpractice in bankruptcy proceedings.

The Commercial Court initiated bankruptcy proceedings against the Nikšić-based Boksiti at the end of 2013, at the request of the CKB bank, due to a debt totalling 1.59 million euros. Prior to that, the bauxite mining company was managed by the Central European Aluminium Company (CEAC), owned by Russian oligarch Oleg Deripaska. Part of the Bauxite Mines’ assets from bankruptcy was acquired in 2015 by Uniprom, owned by Veselin Pejović, following his takeover of the Podgorica Aluminium Plant (KAP).

Boksiti assets sold below market value

The remaining assets of Boksiti, including the building and land, were sold at an auction in December 2021 to a company owned by businessman Milović upon the tenth attempt, as there had been no interested buyers in previous advertisements.

In the first advertisement in May 2019, the price of this property was listed at 1.55 million euros. In accordance with the Law on Bankruptcy, the bankruptcy trustee has the discretion to conduct each subsequent public sale with a reduction in the minimum sale price. The bankruptcy trustee of Boksiti at the time was Mladen Marković, while the bankruptcy judge was Blažo Jovanić.

In the initial advertisement, the Boksiti land was offered at 77.4 euros per square meter, and the commercial building at a slightly higher price of 662 euros per square metre. After nine unsuccessful attempts, the assets were sold below market value. 

According to data from Monstat, the average price per square metre of land in the central region, where Nikšić is located, stood at 42 euros in 2021, coinciding with the time when the property was sold to Milović for 870 thousand euros. This suggests that the Boksiti land was valued at approximately 250 thousand euros on the market. Meanwhile, the administrative building held a minimum value of one million euros, considering that the average price per square metre of an apartment in that period was around 620 euros (Monstat), and even higher within the city centre.

Milović managed to profit well from the Boksiti property sold to Lidl and achieved what the bankruptcy administration of the company could not. He managed to secure the market price for both the administration building and the Boksiti land, resulting in an outstanding profit.

The Hungarian creditor Vagonimpex also submitted an offer on the tenth advertisement. However, the bankruptcy trustee deemed it invalid, explaining that it lacked evidence of a deposit payment, proof of the legal entity’s registration with a certified translation into Montenegrin and a legally certified power of attorney for submitting the offer. Vagonimpex had proposed 800,000 euros.

“The statements in the offer that the evidence of deposit payment actually represents a claim that the bidder has against the bankrupt debtor in the amount of 800,281.54 euros cannot be accepted as valid evidence of deposit payment because such offsetting of claims in the sale process of the assets of the bankrupt debtor is not permitted and is not prescribed by the Bankruptcy Law,” wrote Marković in the explanation.

“The statements within the offer suggesting that the evidence of deposit payment equates to a claim of 800,281.54 euros against the bankrupt debtor cannot be deemed valid. This is because offsetting claims during the asset sale process of the bankrupt debtor is not permitted nor prescribed by the Law on Bankruptcy”, he added.

From the third to the first priority group and back

Former employees have been demanding payment for outstanding claims (wages and other allowances) totalling 2.1 million euros since the introduction of bankruptcy. This includes 15 earned monthly salaries before bankruptcy for about 240 employees, or the difference between the minimum monthly salary of 190 euros they were paid at the time and their full salary.

They were included in the first priority group in March 2021, when Jovanić was at the helm of the Commercial Court. Nonetheless, they did not receive any money because they were returned to the third priority group in another court proceeding.

The Commercial Court, under the leadership of its new president, Mladen Grdinić, who assumed office in April of the previous year, provided clarification on this matter when speaking to CIN-CG.

“The funds deposited by Roaming Montenegro, pursuant to the agreement on the purchase of the business building, were used to settle the claim of the bankruptcy creditor Vagonimpex KFT from Budapest, as stipulated by the final judgment of the Commercial Court of Montenegro dated 20 July 2018”, stated in the response.

As explained, after Roaming Montenegro deposited the money, bankruptcy trustee Mladen Marković made a decision on 21 January 21 2022 to deposit the money into the account of the Commercial Court, pending a decision of the Constitutional Court on his appeal from 2019 against the judgment in favour of the Hungarian company.

In response to the bankruptcy administrator’s decision, Vagonimpex lodged an objection, which was subsequently dismissed. Following this, the Hungarian company appealed to the Court of Appeals. On 13 April 2022, the Court of Appeals annulled the ruling of the Commercial Court and remanded the case for reconsideration.

“In the subsequent proceedings, the Commercial Court on 21 January 21 2022 upheld Vagonimpex’s objection and ordered the bankruptcy trustee to fully settle the claim of this creditor. Accordingly, the bankruptcy trustee made a decision on 20 April 2022 to settle the claim of the bankruptcy creditor Vagonimpex,” the court explained.

Subsequently, on 15 June 2023, the Commercial Court issued a decision to correct the final list of recognized and disputed claims by reclassifying the claims of all bankruptcy creditors, including workers whose claims were based on unpaid net wages, from the previously assigned third payment priority back to the first payment priority. However, by the time this decision was made, the funds had already been disbursed to the Hungarian company.

“So, at the time of disbursing the funds obtained from the sale of the administrative building, the employees, as bankruptcy creditors, were in the third payment priority.”

A representative of the former workers, Rašo Čivović, filed a criminal complaint with the Special State Prosecutor’s Office regarding the sale of the administrative building.

“We are waiting for a call and a meeting with the new prosecutor Nataša Bošković, who has taken over the case,” Čivović told CIN-CG.

Former Boksiti workers expected to collect their overdue wages and other benefits from the sale of the administrative building, which was the only remaining property of the company that had filed for bankruptcy ten years ago.

Čivović believes that everything regarding the sale of the administrative building was “staged” to “pay out the Hungarians.”

The Hungarian company sued Boksiti, seeking compensation for lost profits of 891,000 euros with interest due to the unilateral termination of the ore purchase agreement. The ore purchase agreement was signed several months before the introduction of bankruptcy in Boksiti in 2013 and terminated after bankruptcy was introduced.

Vagonimpex was registered in Hungary in 2006 as a company for the sale of various goods. It has one employee, director Andras Raczko, as stated in Hungarian registries.

Čivović says that the Commercial Court should have paid the workers in 2021 when it issued decisions to return them to the first payment queue. According to him, the problem is that the decisions do not bear the seal confirming their finality (res judicata clause), which, he claims, proves that everything was a game to ensure that the money went to “certain Hungarians.”

Blažo Jovanić, the former president of the Commercial Court, was released from custody earlier this year by a decision of the Court of Appeals, allowing him to defend himself at liberty. He had been held in custody since May 2022.

On 29 December last year, the court approved the proposal put forth by his lawyer, Predrag Đolević, and upheld the decision of the High Court in Podgorica to accept bail totaling 768,000 euros in real estate provided by his family.

Jovanić is charged, among other things, with creating a criminal organization in 2015 that operated in Montenegro until April 2022. The organization included other accused individuals and legal entities, as well as several other unknown individuals whose goal was “to commit criminal acts of abuse of office for illicit gain, with the operation of the criminal organization planned for an unlimited period of time and based on the application of certain rules of internal control and discipline of its members.”

Jovanić and the other defendants are being tried before the High Court in Podgorica based on this indictment. The trial began in June 2023.

As the president of the Commercial Court, Jovanić simultaneously served as the bankruptcy judge for the largest companies in Montenegro – Podgorica Aluminium Plant, Boksiti Nikšić, Radoje Dakić, Vektra Boka, Brodogradilište Bijela, Onogošt, Bjelasica Rada and others.

The Special State Prosecutor’s Office suspects Jovanić of illegally inflating the costs of bankruptcy proceedings using his position as the president of the Commercial Court, as well as his judicial role, with the assistance of certain bankruptcy trustees.

“Illicit financial gain was obtained by directing certain funds, at Jovanić’s order, from the account of the Commercial Court to the account of the bankruptcy debtor, ostensibly for the purpose of conducting the bankruptcy proceedings. Subsequently, this money was transferred to the accounts of members of this criminal group before the conclusion of the bankruptcy proceedings,” reads the decision to remand a part of this group into custody.

Lidl: We always comply with applicable laws

Lidl headquarters in Germany declined to comment on the situation with former employees of Boksiti, stating that they always adhere to applicable laws in all business activities.

They did not respond to inquiries regarding the opening of stores in Montenegro either.

“Montenegro is a retail market where Lidl’s concept of offering high-quality goods at the best prices resonates well with consumers. Therefore, Lidl is investing in potential store locations and warehouses in Montenegro. We kindly ask for your understanding, as at this moment we cannot comment on the extent of our activities, potential locations or possible opening dates,” Lidl told CIN-CG.

Lidl, they added, values transparent and reliable communication and will duly inform employees and stakeholders about the next steps.

The contract signed between Roaming Montenegro and Lidl states that the seller has committed not to construct, operate or manage any grocery stores, supermarkets, self-service stores or similar retail establishments with a sales area exceeding 500 m2 on its properties in Nikšić located within a radius of 1 km from the specified property, within three years from the conclusion of the contract. Furthermore, the seller will not permit third parties to construct, operate or manage such establishments on the mentioned properties.

“In case of breach of this obligation, the seller undertakes to pay the buyer a contractual penalty of 100,000 euros for each individual violation, without excluding the buyer’s right to claim damages, including lost profits,” states the contract obtained by CIN-CG under the Law on Free Access to Information through the MANS platform.

Where did Deripaska’s 17 million euros end up?

Rašo Čivović has been trying for years to determine the whereabouts of the alleged 17 million euros from Deripaska that were reportedly loaned to Boksiti a decade ago and which the Russian oligarch is now seeking in legal proceedings.

Čivović told CIN-CG that if this money had entered Rudnici boksita, the company would not have gone bankrupt because there would have been funds to repay the debt to CKB.

He requested this information from the new governor of the Central Bank of Montenegro (CBCG), Irena Radović, at the end of the year. However, the CBCG declined his request, stating that this information is confidential business information.