Universal Bank's Silent Majority

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By CIN-Serbia

miskovic1Miroslav Mišković’s Delta group took almost a 10 percent stake in Univerzal Banka (Universal Bank) in 2008 without gaining approval from the National Bank of Serbia, and an offshore company partnered with Delta controlled another 4.96 percent of the bank’s stock at the same time, according to stock exchange records, business registry records and Mišković’s own corporate publication.

Serbian banking law require any company or person who owns 5 percent or more of a bank’s stock to file public disclosures and pass a background check to win approval from the National Bank of Serbia. There is no record Delta group or its offshore partner, icon Vanity International of Belize, revealed their ownership or filed an application to control more than 5 percent, National Bank spokeswoman Milica Katić said.

The companies in Mišković’s orbit appear to have skirted disclosure requirements by breaking down share ownership among subsidiaries and related companies.

A review of icon Universal Bank shareholder records shows that in July, 2008, Delvel-Pro and icon Delta Generali Osiguranje (Delta General Insurance) combined to own nearly 9.7 percent of Universal bank. Delta owns icon Delvel-Pro, according to its icon company records, and has a 49.98 percent stake of Delta General in partnership with an Italian/Netherlands company.

Stock Exchange records show that icon Fexiko of Belgrade owned 4.99 percent of Universal in July, 2008 and was the bank’s largest shareholder. Vanity, owns Fexiko which operates out of Delta’s Belgrade headquarters.

Vanity also borrowed more than icon €6.5 million icon from two other offshore companies that controlled an additional 9.8 percent of Universal Bank shares, according to Belgrade Stock exchange figures and a loan document filed in the British Virgin Islands (BVI).

One of those companies, icon Right Start Technology of Belize, was directed by Adem Hamza, who served as a director of Mišković’s Delta Holdings in Moscow. Hamza was also listed as icon Delta’s appointed representative to the Universal Bank Board of Directors until Nov. 2.

On Oct. 28, OCCRP contacted Universal to ask about Right Start, Vanity and Delta’s ownership stakes in the bank. No one from Universal would comment, but four days later Hamza made an amended filing, calling himself an icon independent member of the board of directors and removing all reference to Delta General from the official record.

The loan documents were drawn up by a lawyer from Delta’s Cyprus law firm and filed in the business registry of Tortola, BVI.

Universal Unique Among Serbian Banks

Serbia has 33 banks, but Universal is the only one in which every shareholder owns 4.99 percent or less, thus avoiding the mandatory disclosure rules, Katić said. Universal even makes note of that fact on its website. All other banks have at least some large shareholders, who were approved after a mandatory check of their finances, business history, criminal record and other background information, according to state regulations.

Katić said her agency had not heard of Vanity or any of the related companies until contacted by the Organized Crime and Corruption Reporting Project (OCCRP).

”If we come to realize that there are links between any of these entities, we will react,” she said. “Of course it is possible that five companies owning 5 percent is actually 25 percent or 10 with 5 percent thus gaining control. If there is any doubt (that one entity controls more than 5 percent) then we will check that out.”

Nebojša Jovanović, a professor of corporate, commercial and stock law at the law school of the University of Belgrade, said that owning more than 5 percent of a company without approval even through smaller subsidiaries, is a violation of banking laws.

“If NBS is misled regarding the real and ultimate owner of large shares in a bank (the shareholder) could lose all ownership and voting rights in the shares,” he said.

Mišković, through Delta’s corporate public relations office, did not respond to requests for comment.

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Masked and Complicated Connections

icon Vanity International was founded Jan. 1, 2007, in Belize, which bills itself as a tax haven. Two weeks later, it hired a icon lawyer from Mišković’s Cyprus law firm to act on its behalf, and began buying property throughout Serbia while operating out of addresses occupied by Delta in Belgrade, business registry records show. (See accompanying stories).

Six months later, Delta and Vanity formed a corporation called icon Prezident Nekretnine (President Real Estate) in Bosnia and Herzegovina.  Delta’s attorneys and employees worked for Vanity on property and business purchases in Belgrade, Niš, Novi Pazar, and Banja Luka, according to land and business registry records. Delta owned just under 15 percent of Universal Bank’s shares until 2008, when it lowered its stake to comply with the new law. Since then it has kept a icon 4.7 percent share through Delta General Insurance, according to Universal Bank annual reports.

But OCCRP obtained records from the Belgrade Stock Exchange that show a second Delta-company, Delvel Pro, owned icon 4.96 percent of Universal Bank in July of 2008. That brought Delta’s total to at least 9.7 percent ownership.

Serbian business registry records show that icon Delvel-Pro is owned by Reginablue Enterprises Limited of Cyprus. Reginablue was established at the address of the Neocleous law firm in Limassol Cyprus – the same firm that serves as counsel for Delta and its holding company, Hemslade Trading, according to business registry records in both countries. Oleg Ezhov, then a lawyer for Neocleous, was also Vanity’s first acting attorney, the company’s founding documents show.

A spokesperson for Neocleous said that Ezhov worked in the firm’s Moscow office but left the company in 2008. He could not be reached for comment.

The Serbian business registry contains no hint that Delvel-Pro is owned by Delta or any of Mišković’s companies. But at least two issues of Mišković’s official corporate publication, Delta Today, tout Delvel-Pro as one of Delta’s top divisions.

In January, 2008, an article boasted of icon Delvel’s ”Ambitious Plans” for 2008, and listed its exact place in the Delta family corporate structure. A June 2009 edition icon honored a Delvel employee as among the best under-30 in the entire Delta group operation of companies.

Handy Affiliates

Several companies currently on the list of Universal shareholders or formerly listed as 4.99 percent owners have direct associations with Vanity, stock exchange and business registry records show.

Fexiko is owned by Vanity, according to the Serb business registry. Luce International Investments in BVI, which owned a icon 4.76 percent stake as of Nov. 15, 2010, icon loaned €220,000 to Vanity on Dec. 18, 2007. Latium of Belgrade, which owned a icon 4.929 percent stake in July, 2008, is owned by Right Start Technology.  Right Start is based in Belize at the same address as Vanity, and loaned icon €6.3 million to Vanity on April 20, 2007.

Fexiko, Delvel Pro and Latium are no longer listed as large shareholders on the company reports.

But a new entity, Twidel Holdings Ltd., owns icon 4.96 percent of the shares. Twidel’s address is listed at the same Cyprus address of the Neocleous law firm.

About the Project

The investigation of "Mišković's Millions'' was a joint project of the Center of Investigative Reporting Serbia and the Organized Crime and Corruption Reporting Project. The stories were researched, reported and written by Stevan Dojčinović, Vladimir Kostić, Anđela Milivojević, Dragana Pećo and Bojana Jovanović in Belgrade. Azhar Kalamujic provided additional reporting from CIN in Sarajevo.

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