Franz Kafka, “The Trial”
In May 2011 the prosecutor requested a new criminal investigation against Tomislav Đorđević and the former board of directors and managing directors of Hotel Prag. The allegations are as follows :
• not placing the privatised shares in the custodian account for privatised shares, thus leaving them free for trade
• issuing own shares of Hotel Prag as shares of Tomislav Đorđević and selling them
• conducting a public share issue and diverting funds from the issue to another company of Tomislav Đorđević.
After the conclusion of a privatisation contract, the Privatisation Agency orders all privatised shares to be issued to a custodian account to which the buyer has no access. Tampering with these shares before the privatisation is completed is prohibited by law. In the event of cancellation of a privatisation contract the entire privatised share package must be transferred to the Privatisation Agency.
On 8 October 2009 Tomislav Đorđević sued the Privatisation agency due to unjust cancellation of contract. On 14 January 2010 the Central Share Registry illegaly broke up the privatised share package on the custodian account (account No. 926), following an order from the Privatisation Agency.
As a result, Tomislav Đorđević is against his will labelled as owner of part of the privatised share package to which he lays no claim and over which he can exercise no right. The actions of government institutions could be rectified easily by a counter-order of the Privatisation Agency to the Central Share Registry. Instead, the situation is used as the basis for false criminal accusations against Tomislav Đorđević and the management of Hotel Prag, that they somehow tampered with the privatised share package.
The second accusation is related to the shares issued from the contractual mandatory investment. The board of Hotel Prag is accused of issuing these shares to the account of Tomislav Đorđević, rather than Hotel Prag. According to the Privatisation Law at the time of the contract, the buyer was the unrestricted legal owner of all shares issued from the mandatory capital increase. Furthermore, the Central Share Registry, a state institution, is the only competent authority which determines the rightful owner in accordance with legislation, and there is nothing the Shareholders’ Assembly nor company management can do to influence that.
Following cancellation of the privatisation contract, the Privatisation Agency decided to apply later amendments of the Privatisation law to declare the buyer’s shares from mandatory increase to be own shares of Hotel Prag. Tomislav Đorđević is accused of selling shares which were his property and the board is accused of enabling him to do so.
The third accusation is the performance of a public share issue which was approved and controled by the Securities Commission and announced several times in the Official Gazette of the Republic of Serbia and the national press in accordance with the law. The Privatisation Agency had no objections to the public share offering, of which it was notified. All funds obtained by the public share increase were used for the reconstruction of the hotel.
After the cancellation of the contract the Agency launched a lawsuit to annull the public share issue, for which it has no legal standing and cites no legal grounds, but the pursuit of the “general public interest”. The criminalisation of the privatisation and the public share issue of Hotel Prag is an attempt to forcefully annul the share issue while at the same time retaining the funds paid in by investors.
All of the disputed actions were in the authority of state institutions to either perform or approve. None of the accused had opportunity to influence or bypass the decisions and actions of those institutions. Futhermore, the board of directors and other management have no authority to decide on any aspect of share issues. The majority shareholder Tomislav Đorđević could make no decision regarding share issues of Hotel Prag, without its legality being controled by competent state authorities.
The defence provided non-equivocal proof of the falsehood of all allegations to the court at the onset of the investigation. The court nevertheless decided to proceed with the criminal investigation, which is still ongoing.
Tomislav Đorđević pressed charges against the responsible police inspector for willfully misrepresenting and withholding facts and construing false allegations. The prosecutor dismissed the charges.
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