An Interview No One in Croatia Dares Publish:

Question:    

Mr. Kacinari, would you please describe the origins of your relationship with Zagrebacka banka, or ZABA? How did you become a ZABA shareholder?

Pask Kacinari:       

It all started with a credit I took from ZABA in order to purchase an office space. I was required to make a «guarantee deposit» worth 100,000 German Marks. On the other hand, the bank was obligated to use this money to purchase its own shares in my name, straight from its issuance, according to nominal price.

Question:    

When did this take place?

Pask Kacinari:       

November 13, 1990. The deposit drew interest, and the contract stipulated a period of 13 months, at the end of which there was an option to extend for another 13 months at a time – until one of the sides decided to terminate.

Question:    

Did ZABA proceed to purchase shares in your name, and when?

Pask Kacinari:       

The Lord only knows exactly when they purchased my shares, and how they came up with the dates they now mention. However, I received a Notification of Purchase on April 24, 1991, followed by a Confirmation dated May 2, 1991, in which, however, ZABA informs me that they did indeed purchase these shares – but on April 30, 1991!

Question:    

Did ZABA, thus, fulfill its contractual obligations toward you as a shareholder?

Pask Kacinari:       

They did not fulfill their obligations in full, nor did they close the deposit intended for the purchasing of shares. First of all, the shares they bought in my name at the time, a total of 233, were Emission I Series A shares, whose nominal share price was 1,000 Yugoslav dinars, which, in December 1991, was converted to the same amount of Croatian dinars. Looking at the exchange rate, it is obvious that only part of my deposit was used to purchase shares, with ZABA being obligated to use the remainder to purchase additional ZABA shares in my name.

Question:    

But ZABA claims that they closed your deposit account at that time...

Pask Kacinari:       

And just how would they have done this? You can't close an account just like that. If one side feels compelled to break a contract, it has to notify the other side in writing, with an explanation. This especially holds true for a bank. They never informed me that they closed my deposit account – nor would I have consented to its being closed. The fact is, I took it for granted, lacking any correspondence from ZABA, that my account still existed – which is the most natural thing in the world. And, in fact, it did! When I started inquiring about it again in the summer of 2001, the bank clerk issued me a computer record showing that my account had been closed a short time before – on May 17, 2001. They literally «recalled» that my account did in fact exist when I began asking questions about the fate of my shares – and they proceeded to close it!

Question:    

Who gave the order to close your account?

Pask Kacinari:       

It certainly wasn't me! The computer record provided by the ZABA employee did not contain information about who closed it. But obviously it was the bank's Management itself, i.e. Franjo Lukovic, the Chairman of the Board of ZABA, and his compadres.

Question:    

Did the computer record at least indicate how your account was used all those years?

Pask Kacinari:       

They never provided a record of the account's activity. That's where they are vulnerably, their most closely held secret. Because that record would've shown that ZABA's Management did indeed use my deposit (and many others) to buy shares – successively, as they were issued – but not to the name of the holders of the accounts, but in the name of secret, hidden parties.

Question:    

You said that they purchased Emission I Series A shares in your name. Were these not issued back in 1989?

Pask Kacinari:       

That's the catch. The emitting issuance of these shares was an ongoing process, lasting until December 31, 1993. This was a time of war in Croatia, and they took advantage of the confusion and kept on increasing the number of Emission I Series A shares. They continually published data on this in their Gazette, but the numbers don't add up. The numbers of shares kept changing and increasing. There were 851,827 Emissiion I Series A shares on the day of emission, which kept changing and growing up to December 31, 1993, when it finally settled on the number of 1,862,115. Thus, a total of 1,010,218 Emission I Series A shares literally appeared out of nowhere. However, all these subsequently issued shares were recorded as Emission I Series A shares, with the 1,000 dinar nominal price, which obligated ZABA to purchase them in my name, up to the full amount of my guarantee deposit. By contract, I had the status and rights of one of ZABA's founders, i.e. of sharholders who were entered into the Retister on December 27, 1989.

Question:    

How could the number of shares simply keep «varying and increasing in value» as you say? On what basis?

Pask Kacinari:       

They did not report to the Securities Commission either a new emission of shares or an increase in capital. These shares were simply added to the shares issued on December 27, 1989, however, with all the rights due the original shareholders/founders. The bank did this by issuing an unknown number of retroactive, illegal acts by which they changed the original share-issuing provisions. Such retroactive acts are prohibited by the Croatian Constitution and Croatian laws. At the same time, as they kept on illicitly adding more and more Emission I Series A shares, they also proceeded to increase the number of original shareholders. Thus, from the original 1,287 as of December 27, 1989, the number of shareholder/founders grew to 1,484, or 197 more. At the same time, the bank kept opening new client guarantee deposits, including my own. This means that they literally stole the shares they bought with funds out of my own deposit account, and registered them to the name of a third party of an unknown identity, who now became one of the newly registered shareholders. Later, on May 31, 1994, they somehow «discovered» a capital increase in their books, and proceeded to grant an increase of 42.86% to the number of shares held by each of the shareholders registered at the time. To conclude, the party who gained possession of my stolen shares received an increase of 42.86%.

Question:    

Any clues as to the identity of the owners of these «newly discovered» shares» which, as you say, appeared «out of nowhere,» without proper and sufficient disclosure?

Pask Kacinari:       

I say that it was the off-shore firms of the political elite from the ruling Croatian Democratic  Union (HDZ), along with persons from ZABA's Management itself, headed by Chairman Lukovic, that became the owners of these shares, which were stolen while there was a shooting war in Croatia. In this way, they literally stole the largest business entity in Croatia. This also means that the bank never underwent transformation and privatization, and that the Croatian state did not earn a cent from this formerly state-owned bank's shares.

Question:    

You are, in fact, claiming that, in the case of the largest bank in Croatia, the privatization process was entirely circumvented?

Pask Kacinari:       

I claim under full responsibility that, at the beginning of the official privatization process in Croatia in 1995, the country's largest bank – was already private! And, further – that the majority of the just-privatized firms were in fact debtors of that very same bank. Thus, those who had stolen the shares of ZABA and proclaimed themselves, through their off-shore companies, to be its onwers, gained crucail leverage over the firms undergoing privatization in 1995 and, by extension, over their new owners.

Question:    

What was the actual technique by which, as you claim, these new, illegal owners obtained shares of ZABA?

Pask Kacinari:       

By way of secret share auctions organized by ZABA's Management itself, by way of its then-Vice President, Nikola Kalinic, and Mr. Duilio Belic. By way of these auctions, they «disasociated» themselves of the original bank founders, who provided ZABA's original capital in 1989, 1,287 entities in all, representing the majority of Croatia's economy, which employed tens of thousands of workers. These auctions were a joke – ZABA's Management served all roles, being the secret buyer, the unwitting «sellers'» agent, and the orgainzer, all according to secret rules it set itself. They even made a diagram of the scheme, from which we learned that they even invented a new word in the Croatian language: «jeftimba», meaning a process by which the share price is to be driven as low as possible, so that the buyer, i.e. the auction organizers themselves, could purchase them for nothing. They conducted all these so-called auctions in the same way, driving the shares to rock-bottom prices. However, they left a paper trail behind, with the signatures or either Mr. Duilio Belic or Vice-President Nikola Kalinic. I have also come by the «Plan for the Privatization of ZABA,» which reveals that the shares were to pass to the name of «ZABA HOLDING,» whose founder was ZABA itself! Thus the bank was buying up its own shares, but in a covert manner. This is proved by the fact that even the bank's auditors never could determine the precise number of ZABA shares. All the auditing reports to this day quote that the bank has «a certain number of Treasury shares,» without revealing their number. What they did was to put all the stolen shares in the bank's Treasury and then use them for voting at Shareholder Assemblies, which is against the law. They never revealed the exact number of Treasury shares so that they could subsequently manipulate them.

Question:    

By your account, it appears as though what was once the biggest bank in Croatia has become a totally virtual entity – a virtually privatized bank with virtual owners owning virtual shares – something like a video game?

Pask Kacinari:       

This is what I call the ZABA Black Magic Show. The bank was never privatized – yet, by some miracle, it's a «private» bank. The State of Croatia, the former owner of all state-owned enterprises, never received a cent from this so-called privatization, nor did state body ever bring any decisions regarding ZABA's privatization. No judicial, administrative or legislative body has ever dealt with the matter of ZABA's so-called privatization. Neither the Croatian Government, the Central Bank, the State Auditing Office, nor the Privatization Fund have any knowledge regarding when and how the bank was privatized. Yet they still treat it as though it is private. This situation, in which no one knows when the bank was privatized yet still claim that it, in fact, is private, it's like claiming that someone exists despite incontestable evidence that they've never been born. Thus, these fictitious owners of the bank are something akin to ghosts – or evil spirits...

Question:    

It seems, then, that the current state of affairs in ZABA is quite undefined?

Pask Kacinari:       

It comes down to this: a group of completely illegal quasi-shareholders, by way of their off-shore firms, is «holding» the shares of ZABA. In the process, they are also receiving dividends from the Italian and German (i.e. Unicredito Italiano and Allianz A.G.) guardians of the shares.

Question:    

Can you be a bit more specific?

Pask Kacinari:       

These domestic quasi-shareholders, or their off-shore firms, swapped their shares iwth Unicredito Italiano, which, in turn, issued them so-called «New Unicredito Shares.» They receive dividends for these – which are actually dividends for 96% of the shares of Croatia's largest bank. The combination also includes the «Varazdinska banka» bank, which makes this the biggest banking group in Croatia as well. These dividends are paid to various off-shore firms scattered over the globe, on islands which even a professor of geography would have a hard time locating on a map – and all this goes into the pockets of the «locals.» To be more precise, the gang that sits in the «Hennessy Cafe» in Kaciceva Street in Zagreb.

Question:    

This isn't the first time this cafe is being mentioned as one of the informal «centers of power» in Croatia?

Pask Kacinari:       

Centers of power? It is amazing that we are talking about this at the beginning of the 21st century, with «center of power» standing for someone who has stolen shares of a bank and holds these shares, and no one is allowed to ask questions about it.

Question:    

Nevertheless, as the owner of a number of shares, you are still trying to assert your rights within the institutions of the bank itself, in addition to the legal action you have taken?

Pask Kacinari:       

Yes. Namely, I own shares both to my own name and redeemable to the bearer. I have converted 3 shares to the bearer into shares to my own name, and I vote with these shares at Shareholder Assemblies – if nothing else so that none of these gentlemen from Germany and Italy can claim that they «didn't know» about any of this.

Question:    

And what happens at these Assemblies in which you participate?

Pask Kacinari:       

They outvote me by 890,000 to 1. But they hear my arguments. They listen to them for hours each year at the Annual Meetings, and they offer no counter-arguments. Simply put, they have nothing to say, and they are not used to anyone asking any questions. That's what's confusing them.

Question:    

According to your claims, then, the ZABA Shareholder Assembly practically consists of phantom shareholders who vote with phantom shares.

Pask Kacinari:       

Yes. Absolutely everything connected with these shares to the bearer is proof that the ZABA Share Registry is a pure forgery. First of all, on each of these shares to the bearer it is printed that 50,000 were issued. On the other hand, in its Gazettes of that time, ZABA gives the number of 25,000, while today, their Share Register gives the number of 11,325. These are three totally contradictory figures, which have nothing to do with each other. Still, the figure that counts the most is the one given on each individual share – 50,000. This is also indicated by the serial numbers themselves: for example, I have a share with a serial number of 49,000+, which proves that the number issued was neither 25,000 nor 11,325. In addition, I converted these to shares in my own name – which ZABA neglected to record in the Share Register, even though they issued me a Confirmation of Conversion on April 15, 2004. Therefore, if ZABA's Share Register wasn't the joke that it is, a totally rigged document, then the number of shares to the bearer listed in it would have decreased by three. Yet, they issued me the Confirmation, recognizing my right to participate in the Assembly as a name shareholder (formerly, I participated as a bearer shareholder), but they «forgot» to record this in the Share Register. This «oversight» took place at a time when Allianz A.G. and Unicredito already became nominal owners of ZABA and had their representatives on its Supervisory Board.

Question:    

Besides your own case, two other cases involving ZABA have also caused media stirs – the cases of «Gavrilovic» and «retag». Are all these cases in any fundamental way connected?

Pask Kacinari:       

All three cases, although not identical, indicate that the bank has been robbed, and that its shares have been «disappearing.» In the «Gavrilovic» case, it is a case of that company being registered with the Zagreb Commercial Court as the legal successor of one of ZABA's founding shareholders from 1989, proving that the shares existed and that the successor had a right to ask about them because they are his – and still these shares are somehow «missing.» ZABA claims there are «no papers» showing how the shares disappeared, but disappear they did – again, during wartime. In my own case, I purchased shares via a guarantee deposit for Emission I Series A shares, which went directly into the bank's founding capital, on the basis of which they were obliged to issue me Emission I Series A shares to my name, at nominal price. Yet, they bought my shares in the name of a third party, which took over founding rights to the bank. In the case of «Retag,» its legal predecessor firm, «Tekstil» was also one of the bank's founders in terms of capital. However, «Retag» did not want to retain the shares at a time of the bank's reorganization into a shareholder company, and demanded its founding capital bank, which it had a right to under the original contract. However, the bank kept this capital to itself and bought shares in who knows whose name, while withholding «Tekstil's» money for years. Still, the bank was finally forced to return the money after all these years, with interest.

Question:    

Havng in mind the state of Croatia's legal system, are you considering taking your case to a third country?

Pask Kacinari:       

Yes, I have already engaged a U.S. law office, since the case of the stolen shares involves huge financial services multinationals, whose shares trade on markets worldwide. Since these corporations, Allianz and Unicredito, have become the guardians of stolen shares, this has tainted their own shares on a global level, which brings in many other parties, including those on the other side of the Atlantic. My attorney shall inform all the relevant U.S. agencies of this case. In other words, no one involved will be getting off easily.