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"HOLY COWS" OF SERBIAN PRIVATIZATION

’’MINEL ELVO’’, BEOGRAD CASE




Belgrade, August 29, 2007
The privatization of ’’Minel Elvo’’ Beograd ended by the Contract on public capital sale, through soliciting for tenders, of the privatization subject, ’’Minel Elvo’’ Beograd, signed on Dec. 5, 2006 between the Privatization Agency and the buyer, Dusimir Zabunovic from Belgrade. The Shareholders Meeting was held on December 28, 2006 at which the enactments and by-laws were adopted and the Management of ’’Minel Elvo’’ Beograd elected. The company’s operations were favorable during the privatization process in 2004 and 2005 and its business operations were also favorable at the proper time of privatization and signing the Purchase and Sales Contract on December 5, 2006, and there was also profit stated in the balance sheet for 2006. During the entire period prior to privatization and in the privatization period, the labor cost was agreed on regularly, in compliance with the C.A., and earnings paid out on a regular basis.

As from company take-over by the new owner, Dusimir Zabunovic and his team of managers, problems arose in the payment of earnings and recently in securing operations continuity as well.

Trade Unions of ’’Minel Elvo’’ Beograd tried several times to solve the problems that emerged with the new owner and his managers team, but unsuccessfully, due to new owner’s insisting on reduction of employee earnings to a minimum, as they were high in his opinion. According to such opinion, the new owner started payment of employee earnings without previous agreement with trade unions, non-observance of the C.A. and Annex 1. to the Collective Agreement, as follows:
-pay for February amounting to 55%, without final payroll account,
-pay for March in the amount of Din. 10.000, without final payroll account,
-pay for April in the amount of Din. 10.000, without final payroll account.

Responding on such new owner’s behavior, trade unions of ’’Minel Elvo’’ sent a request to the Privatization Agency, Inspection Department, to carry out special inspection regarding the observance of Annex 1. to the Purchase and Sales Contract.

The Inspection Department carried out the inspection on April 20, 2007 and filed a report to trade unions. In the report, paragraph: social aspect, item 2., this Department established the facts incorrectly by claiming that the payroll account method hasn’t been changed after the privatization. In fact, the payroll account method has been changed drastically after the privatization and employees didn’t receive the final payroll account, stated by the Labor Inspection of the Ministry of Labor, Employment and Social Policy. In the meantime, the new owner received a Warning from the Privatization Agency, Approvals Department, that earnings in ’’Minel Elvo’’ were increased without the Agency’s approval, and he was ordered by the Agency to bring them back on the previous level within 8 days. Such a position of the Privatization Agency, Inspection and Approvals Department, which hasn’t been based on any fact and on the documents, based on which the sale of ’’Minel Elvo’’ has been carried out, is also contrary to Article 25a. of the Privatization Law, because the company had favorable operations during the privatization process, so that no approval was required, and finally, the buyer was informed about the company’s overall financial situation, and he signed the Purchase and Sales Contract (item 5.1.5.).

Such Privatization Agency’s position caused legal effect on employees and trade union presidents, from bringing criminal charges against the unionists by the owner, up to reduction of employee pays to a minimum, and at the end the owner offered employees an Annex to the Labor Contract, in which he offered them payment of earnings he paid out so far (Din. 10.000), as the last pay, explaining this by economic difficulties in which the employer got into.

It is obvious that the Privatization Agency protects the buyer of ’’Minel Elvo’’, Dusimir Zabunovic, as it has been notified that Mr. Zabunovic, one of the ’’holy cows’’ of Serbian privatization and owner of ’’MPS – Beograd’’, violated almost all the provisions of the Purchase and Sales Contract in five months only, which is the reason for termination of the same. The goal has been attained, namely, the Privatization Agency, Inspection Department in charge of inspecting the observance of the Purchase and Sales Contract, got an ’’alibi’’ and was instructed not to terminate the mentioned Contract with Dusimir Zabunovic.

How did Dusimir Zabunovic obligate this state, so that a government agency, such as the Privatization Agency, based on incorrect data, gave him an ’’alibi’’, although it is aware that a responsible person commits a criminal act of office abuse.

 
     
 
 
 
 
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