INVESTIGATION: President Djukanovic’s nephew bought a tourist complex of 20 million for 45.000 euros

Edin Kolarevic (35 years) from Podgorica, nephew of the President of State of Montenegro Milo Djukanovic, a several months ago became the owner of an exclusive tourist complex “Dobrota Palazzi” near Kotor.

The complex worth more than 20 million Kolarevic bought for only 45,000 euros! This is shown by the documentation of the Tax Administration which was obtained by the journalists of the Crime and corruption network – LUPA and the Estonian newspaper “Äripäev”. This unusual Contract was signed on November 7, 2018, at the office of Kotor Notary Mrs. Irena Kovacevic.

It is a contract on the transfer of 100 percent of shares in company “Serzman Incorporated” from Kotor, which is behind the valuable tourist complex. The signatories of this deal were Slavko Vujovic and Edin Kolarevic. Transfer of ownership of the mentioned company was made from Vujovic to Kolarevic. Data of the National real estate agency show that at the time of signing of the contract Company “Serzman Incorporated” owned immovable property worth millions of euros near Kotor.

Directorate for prevention of money laundering and financing of terrorism published a manual for identifying suspicious transactions and clients, on page 18 of the manual it is said that a transaction is considered suspicious if – “the party sells a real estate at a relatively short notice, although it is clear that the sale itself for this party would be a business loss”.

By the agreement of transfering 100 percent of shares of the company “Serzman Incorporated” Vujovic had sold the company for 45.000 euros, which owned and still owns immovable property worth millions, which is evident operating loss.

Notary was obligated to report this transaction to the Administration for prevention of money laundering as suspicious, or to any competent authority, but she did not do it.

Kovacevic has responded to a reporter’s question, that she was not obliged to, because it was not a sale of real estate, but a share holding transfer and therefore did not have to check the data of the Tax Administration regarding how many real estate or other asets “Serzman” had  when concluding the contract.

“The contract referred to in your question is not a treaty by which property is bought and sold, but a treaty by which shares of business  organization were transferred. Contract-carrying transfer of shares in the company is concluded in written form with the certification of signatures by a notary or Court. By validating the signatures on the contract notary or other authority only confirms that the contract contains signatures of persons that are contracting parties. Since the object of the contract are not the properties but shares in company and the subject of the certification are only the signatures of the parties, as a notary I do not have the authority to check the property of the parties and its value with the IRS or any authority. Even if the contract was sales of property, and it wasn’t, I also would not have the authority to check other assets of the parties, except one, which was the subject of the contract and I could only check the part relating to the permissibility of traffic, which notaries determine from a Property list which their clients attach ” wrote in her reply Public Notary Mrs. Kovacevic.

She pointed out that she believes that “The whole act was in accordance with the Law of Notaries, as well as with the other laws during the conclusion of the said contract.”

According to data collected for this research, Notary Kovacevic, had access to the entire list of  real estate owned by the company “Serzman Incorporated”, before concluding the contract on the transfer of ownership in that company, because for years she wrote notarial records related to the property now owned by Kolarevic’s company.

The beginning of the business

In the records from the Central Registry of Business Entities (CRPS) it can be seen that the company “Serzman Incorporated” founded in September 2014. As the sole founder of the company Slavko Vujovic was listed, vhile the Executive Director was a citizen of Serbia Sasa Radojkovic, with an initial capital of one euro.

Register of the CRPS in June 2015 recorded an increase of capital of the company “Serzman Incorporated” in the amount of up to 4.6 million euros. The capital increase was carried out on the basis of the merger with Kotor-based company “MD Enterprise”, which owned millions in real estate on which a few years later luxury resort “Dobrota Palace” was built, within which operates a five star resort ‘ Allure Pallazi “.

Mergure of capital of the two companies has been recorded on 15 July 2015 in the Statute of the company “Serzman Incorporated”, which assumed legal obligations of the company “MD Enterprise”, which was liquidated the same year. Four months after the merger, namely 20 November 2015, Vujovic has ruled the reduction of capital of the same amount of 4, 6 million, expressed in real estate, due to an, what he told the authorities, alleged error. This was recorded in the CRPS, so that after the event the capital of ‘ Serzman Incorporated ” was one euro again. According to the data of the real estate administration of Montenegro “Serzman Incorporated” even after the deduction of capital owned millions in real estate near Kotor.

At the time when Kolarevic bought the company for 45.000 euros in November last year, its equity was due to the registered capital reduction – according to the commercial register was one euro, however the property in its ownership exceeded a value of 20 million euros (about ten luxury villa, 89 hotel room, beach, pools, three restaurants and five bars). Only one villa, according to documentation obtained in the research, is worth about 1.2 million euros. What made Slavko Vujovic to practically gift milions to the nephew of President Djukanovic is not known.

The phone book has registered several numbers registered to Vujovic, some of which are not in operation and some are used by his friends. One of them told the journalist that Vujovic does not want to talk to journalists, and that he does not want to give his contact.

There are other details that speak in favor of the suspicion that Vujovic was only the public face of “Serzman Incorporated”, and that the rightful owner was Kolarevic all the time, who tried to be hidden from the public for years.

The journalist contacted Edin Kolarevic, with a question about the company “Serzman Incorporated”. Kolarevic said in a message that unfortunately he sees no basis for communication on corruption and crime issues.
“I have no knowledge of them”, wrote Kolarevic.

Suspicious deals with the municipal property

Company “MD Enterprise” is mentioned in the criminal complaint from July 2015, of the Network for Affirmation of NGO Sector (MANS). A criminal report was filed against the authorities in the municipality of Kotor regarding of exchange of the property by the seashore, on the site of a former auto-camp in the settlement Dobrota, which is allotted to the “MD Enterprise” and which later became the property of the company “Serzman incorporated”.

MANS even then claimed that Edin Kolarevic was a part of that deal through related companies from Cyprus – Agneta Investments Limited, which has at the end of October 2014, founded the company “MD Enterprise”.

– Municipality of Kotor in mid-November 2014 adopted the Decision on the exchange real estate in order to completing urban plots No. 1080 Ko Dobrota I. Municipality exhcanged their plots worth 168 thousand euros for the plots of “MD Enterprise”, which were estimated at 240 thousand. At the same time “MD Enterprise” assumed an obligation to build a road, while the Municipality of Kotor obliged to pay the difference in market value between the properties that are exchanged, in the total amount of 71, 3 thousand – is indicated in the earlier case study of MANS. They announced that the representatives of the Municipality then called upon the Law of State Property and Law of Obligatory relations saying that it’s very controversial that the agreement transferred ownership rights of exchanged plots, although both parties have only the right to use them. Also, the law on state property stipulates that assets and other goods that Montenegro or municipality can not be exchanged with the application of the principle of equal value of mutual considerations, if it is in the interest of conducting business of state and municipal authorities.Specificly in this case, they argued, there was no interest for the Municipality to exchange the land, but it was a favor the Municipality of Kotor made for “MD Enterprises” for which it filed criminal charges. What is its epilogue was not possible to find out, given that the representatives of the Montenegrin Supreme State Prosecution (VDT) did not respond to reporters’ questions sent on 14 March this year.

Work permit for the West Bank, Loans and creditor from Estonia

Tourist Complex “Dobrota Palazzi” wasn’t built overnight and for its construction, as was previously reported by the media, about 20 million euros was spent. The data collected for this study shows that most of the money provided from the credit of the Zapad Bank (West Bank) and in which the majority owner is Ukrainian businessman Vlodimir Kostelman.

It is a bank that has obtained the license to operate from the Central Bank of Montenegro (CBM) in late January 2015. The application for approval of a license for its operation was filed by law firm of Ana Djukanovic, the mother of Edin Kolarevic and sister of President Milo Djukanovic. Djukanovic had a contract with the Zapad Bank since its establishment regarding general legal representation in Montenegro. Shortly after obtaining the license for operations first loans started. Among the loans with a maximum approved amounts Kolarevic Company “Serzman Incorporated” preceded, it received the first 300.000 euros in May 2015. A month later, this company has received another loan of 330.000 euros from the Zapad Bank and and in November took another 250.000 euros (880.000 euros total).

At a time when loans were granted, mainly in the media close to the government of Montenegro it was reported that the tourist resort “Dobrota Palazzi ‘ was planned to build by an investor from France, who was represented by former Montenegrin footballer Nisa Saveljic. However, it turned out that was not the case and that everything actually moved around Edin Kolarevic, who was at the end of last year formally listed as the owner. This is proved by the documentation of the loans from Zapad Bank to which the journalists from the Crime and corruption reporting network – Loupe and the Estonian newspaper “Äripäev” acquired.

The representatives of the Zapad Bank in April 2016. signed a contract on investment loan with “Serzman Incorporated” of the amount of about 6.1 million, of which 880.000 euros used for the refinancing of loans from 2015, while 3.8 million were meant to be used for the construction of 10 villas within the project “Dobrota Palazzi”. When it comes to the remaining 1.4 million it is not clear how it was spent.

The Treaty on the investment loan states that guarantees for ” Serzman Incorporated ” are Edin Kolarevic (guarantee  A) and company from Estonia – “Caliptra Investment “(guarantee B). Interestingly, the owner of 100 percent of the Estonian company’s capital, which is a guarantee for a loan now Kolarevic’s firm by its deposit of 6.2 million in the Zapad Bank, is the Ukrainian Lia Morokhovska – who is also the owner of 34.7 percent shares of the Zapad Bank. As the authorized person by the Estonian company in the documents related to credit support name of the Secretary of the Zapad Bank Vesna Djuranovic and former translator of Russian language of “Invest Nova” company is mentioned, which is co-owned by Aco Djukanovic, brother of President Milo Djukanovic.

In the contract of the investment loan with “Serzman incorporated” it is envisioned that the project of building the second phase of the tourist resort will cost 7.1 million. Part of the amount of 3.3 million euros, as agreed with the Bank should provide Kolarevic’s company by selling 7 out of 10 exclusive villas by October 2017.

According to the data of the Real Estate administration of Montenegro, 10 villas are registered as property of “Serzman Incorporated”, on whose property a mortgage is registered in the name of Estonian company. Part of the property is registered in the company itself, “DS Hotel Facility”, whose founder is “Serzman Incorporated”.  Even in 2018 Zapad Bank has approved loans worth millions to Kolarevic company. During the last year on behalf of one of the loans an apartment of 214 square meters in Podgorica owned by Ana Djukanovic, who has been identified as the warrantor was pawned.  The relationship of Zapad Bank, the company “Caliptra investment” and the company “Serzman Incorporated” is complex and unclear, since it is extremely difficult to assess the total cash amount which was provided for the project “Dobrota Palazzi”.  On the other hand, it is clear that the representatives of the Zapad Bank acted helpfully and that they’ve provided millions to the owner of a luxury tourist complex, which was officially opened in June last year, with guests who were greeted by Kolarevic, along with dignitaries among whom were President of Montenegro and his wife.

Authors: Stanko Radulovic,  Eliisa Matsalu and Koit Brinkmann

Investigation was conducted by investigative journalists from Montenegrin Crime and corruption reporting network – LUPA and the leading Estonian financial newspaper “Äripäev”.