While FDS Lays Off Workers, Sarajevo Canton Prosecutor's Office Investigates Privatization Process

SARAJEVO, (Patria) - The Social Democratic Party (SDP) of Bosnia and Herzegovina filed a criminal complaint in 2016 against the Prime Minister of the Federation of Bosnia and Herzegovina Fadil Novalić, his deputy and also Minister of Labor and Social Policy Vesko Drljača, and against the Director of the FBiH Privatization Agency Drago Vrbić.

The reason for this, as they stated, was "illegalities and lack of transparency in the privatization of 39.9 percent of state ownership in the Sarajevo Tobacco Factory."

According to the explanation in the complaint, the Prime Minister and the Minister influenced the decision of the FBiH Government regarding the method, i.e., the method of privatization of the Tobacco Factory.

The Sarajevo Canton Prosecutor's Office confirmed to the Patria agency that they are conducting checks regarding this complaint.

- The case is in progress - said Azra Bavčić, spokesperson for the Sarajevo Canton Prosecutor's Office.

The announcement of the layoff of 218 workers from the Sarajevo Tobacco Factory has reactivated the story regarding the privatization of this company, carried out by the government of Fadil Novalić.

British American Tobacco (BAT) purchased in September 2016, through the Austrian company CID Adriatic Investments GmbH (CID), 39.9 percent of the shares of the Sarajevo Tobacco Factory (FDS) that belonged to the Federation Government. The FBiH Government's share was paid 42.7 million KM. CID remained the owner of the shares and gradually increased its stake to 78.7 percent, which it holds today.

BAT never took over the shares but, as announced in January 2017, reached an agreement with CID to take over the tobacco part of FDS's operations. BAT then announced it would take over all tobacco brands and retail operations (Tobacco Press).

CID is a ''company'' founded in Vienna in May 2016, and at the time of taking over FDS shares, it had only two employees, which further cast doubt on the transparency of the FDS sale and raised suspicions of an unfair deal.

The director of CID is Walther Alexander. His name appears in 38 companies registered in Vienna, most at the same address. He was also discussed in the Austrian Parliament, and the media linked him to a major scandal in Italy, also related to suspicious transactions.

Halil Čengić, president of the association „Dividenda“, also pointed out that FDS shares were sold at an extremely low price.

- That is an extremely low price for everything the buyer gets. And, the special story is that CID Fund. Who stands behind it? I think it's those who already have 10 percent of the shares - said Čengić.

It seems that the dark suspicions for FDS are coming true.

What is known at this moment is that a new company has been established, also named FDS, to which the operations of the Sarajevo Tobacco Factory will be transferred. The difference is that the new company is a limited liability company, while the old one is a joint-stock company.