pages 5 & 6

The affair concerning the Zagreb Bank, owned by UniCredito Bank and the Allianz insurance company, has received its epilogue in the USA. Pask Kacinari, Zagreb jeweler and one of the founders of the Zagreb Bank is accusing this bank and its owners of stealing his shares worth 50 million Euros, of illegal privatization and shady financial dealings.

So as to protect his shares and his rights in the Zagreb Bank, Kacinari has filed a report to the USA Congress Committee for Securities accusing Allianz of falsifying books and capital. Allianz is the present owner of the Zagreb Bank. An investigation of this Committee is now expected.

The Zagreb daily Jutarnji List on Wednesday writes of the existence of another affair in the Zagreb Bank. Jutarnji List writes that on 21 December last year the President of the Management Board of UniCredito Bank Alexandro Profumo met with the Croatian Prime Minister Ivo Sanader and the Director of the Zagreb Bank Franjo Lukovic so as to arrange the purchase of the Split Bank. As the Zagreb Bank is the majority owner of the Split Bank, it turns out that UniCredito Bank is buying itself. Belgrade weekly Evropa wrote of the affair in the Zagreb Bank in December last year:

“The same as one of the untouchables in Serbia, Bogoljub Karic, so also in Croatia one of the untouchable companies is the Zagreb Bank, one of the two most powerful Croatian Banks. The recipe is the same: the war of the 1990s as a foundation for the amassing of wealth and the combination of finances and policy as a guarantee for inviolability. Today the capital of the Zagreb Bank is estimated at an incredible 8.5 billion Euros, and it holds control over 35 percent of the Croatian economy.

“Pask Kacinari is a Zagreb jeweler who in 1990 became one of the founders of the Zagreb Bank. He claims that in the case of this bank this concerns the biggest robbery in Croatia, worth over seven billion Euros. Those who have been robbed are the Croatian State, the citizens and 1287 companies which took part in the founding of this bank in 1989 and from whose hands the Zagreb bank in an illegal way passed into private hands.

“Based on the sequence of events and the gathered documents, Kacinari and Tatarac believe that those involved in the shady dealings over the Zagreb Bank are the communist nomenclature from the old Yugoslavia, and also businessmen who today make up the Croatian financial establishment, such as the President of the tobacco company Tvornica Duvana Rovinj Ante Vlahovic, and the President of Pliva Zeljko Covic. All this took place with the silent support of the political leaders during the 1990s who were at the top in Zagreb and Croatia.

“Kacinari also claims that the Italian bank UniCredito and the German insurance company Allianz, which in 2002 became the owners of the Zagreb Bank, did not actually purchase the bank and that the bank’s purchase was actually only a fictional transaction with the aim of covering up the illegalities in the dealings of UniCredito and the Zagreb Bank.

“Kacinari claims that during the 1990s, in the course of the bank’s privatization, more than 50 million Euros worth of shares were taken from him, and his compensation claim is for that same amount. A second possibility is for him to receive about 142,576 shares of the bank and an interest rate of about 10 million Euros.

“In 1990 Kacinari raised a loan in the Zagreb Bank of 500,000 Euros and by this act received the status of one of the bank’s founders. Acquiring a loan required Kacinari to pay the bank a guarantee deposit of 100,000 German Marks by which he became January 5, 2006

its shareholder. The bank did purchase these shares, but not in Kacinari’s account, but for someone else’s account, whose name they have on record. When, in 2001, Kacinari went to the bank to see what was happening with his shares, he was informed that, in fact, he wasn’t a shareholder at all.

“Kacinari’s lawyer Ozren Tatarac says that, while searching for his shares, Kacinari found out that the bank had been secretly and illegally increasing the original emission of shares up until 1993, which created over a million shares without registering the increase of the founding capital and without registering the new emission of shares.

“The names of the owners of those and Kacinari’s shares were never revealed. Since the beginning of the war in Croatia, instead of people with names and surnames, various offshore companies registered abroad appeared as the banks’ shareholders.

“It is significant that these shareholders elected to their supervising boards Vlahovic and Covic, Presidents of the TDR and Pliva – says Tatarac.

“Kacinari’s lawyer says that this fact is significant considering that by the nature of things those sitting on supervising boards are always representatives of the owners.

“It would be interesting to see when TDR and Pliva were privatized. For, at the moment when privatization began in Croatia, which is 1995, the Zagreb Bank, and TDR and Pliva were already private companies.

“Tatarac said that Ivic Pasalic, former advisor to [Croatian President] Franjo Tudjman, told the story of how, at Tudjman’s question concerning the privatization of the Zagreb Bank, the then Prime Minister Nikica Valentic replied that the bank was already private. This astounded Tudjman and his entourage including

Pasalic, since nobody knew about this and they did not have a single document to show the manner in which this had been done. “Vlahovic and Covic are on the tip of the iceberg, and Tatarac and Kacinari suspect that beneath them there are at least a dozen people who took part in the appropriation of shares.

“Tatarac was not able to give a precise answer to the question as to how the machinations with the shares and the privatization of the bank were made possible. “-We can assume that in the team of people who proclaimed themselves to be the bosses of the bank, that is behind those off-shore companies which bought the shares, there was a group of people who in Croatia called themselves techno-managers, and also called themselves the group from Henesi, by the name of the club where they congregated – says Tatarac.

“This is a group which gathered some of the leading men from the Croatian political and public life in the 1990s and mostly that political wing and authorities which sprung from under the wing of the former communist nomenclature which was connected to foreign trade and finances.

“Machinations with the founding rights acquired by Kacinari by raising a loan led to a dispute with the Zagreb Bank. Now there are two trials going on: one before the Municipal Court in Zagreb, and the other before the High Trade Court.

“Apart for the Croatian courts, this year Kacinari initiated trial proceedings before the American Congress authorities which control the work of the New York stock exchange, where Allianz’s shares can be found. As the UniCredito Bank also had a part in the whole story, the charges indirectly concern them also. In 2002 the UniCredito Bank and Allianz became the owners of the Zagreb Bank by making an exchange of ownership with its owners, unknown to the Croatian public. With this switch the Croatian owners managed to hide their identity. The Italians gave the owners of the Zagreb Bank a part of their shares in exchange for eighty percent of the Zagreb Bank shares, while the remaining 20 percent were paid in cash.

“Tatarac says that Allianz and UniCredito Bank would not be able to prove how the shares exchanged owners, from the first owners, the bank’s founders, to the people from which the shares were purchased.

“Kacinari believes, however, that UniCredito Bank did not in fact purchase the Zagreb Bank. “The Italians made a deal, because they had information that the team had robbed the bank and that it wasn’t their ownership.

The Italians blackmailed them and created New UniCredito shares. That bank is a mere launderette. It has growth rate that is unbelievable, every year it is increased by 20 percent”, says Kacinari.

“Kacinari also says that it seems to him that the present authorities in Croatia are helpless. He adds that the Croatian Prime Minister Ivo Sanader has on two occasions supported his idea to have the case of the Zagreb Bank investigated, but that the investigations was, twice, obstructed in the courts.