SDA cedes insurance sector to HDZ, Delić's resignation agreed upon

The government of Prime Minister Fadil Novalić (ministers from SDA and HDZ BiH made the decision in June 2015) is not abandoning the sale of just over 45 percent of its own stake in Sarajevo-osiguranje, even though it is the largest domestic insurance company in Bosnia and Herzegovina, which operates successfully, writes Patria. 

Novalić seeks an alibi for the sale in claims that this company is not „state treasure.“ On the contrary, says the Prime Minister, Sarajevo-osiguranje is in the red by 31 million KM, and the company has not paid a single KM to the Federation budget for several years. If the Government sells the shares in this insurance company, Novalić claims, the money will go to the pension fund.

For months, Novalić has been trying to convince the public that the citizens of the Federation have no benefit from Sarajevo-osiguranje.

The subject of the sale at the end of June this year was 2,108,469 government shares of Sarajevo-osiguranje. The initial share price was 12.99 KM per share, but it was quickly lowered to 10.39 KM. 

The first two sales failed, so it is now expected that the shares of Sarajevo-osiguranje could fall further. Therefore, if the Government's stake in this insurance company were sold even at the current price, the Federal Pension and Disability Insurance Fund would benefit by just over 20 million KM. 

Given that more than 160 million KM is needed monthly on average for pension payments, it is not difficult to conclude that this is just a drop in the ocean, and that the sale of Sarajevo-osiguranje yields nothing except benefits for individuals who devised the plan to sell it at a giveaway price. 

Reports on the company's operations obtained by Patria reveal that the situation at Sarajevo-osiguranje is completely different from what Prime Minister Novalić portrays. 

The company is worth many times more than the 20-odd million KM the Government would get from the sale. Just the real estate of this company in BiH is estimated at around 50 million KM!

Sarajevo-osiguranje had about 400 employees last year. The total portfolio – the business group for 2015 amounted to about 65 million KM. 

Of that, this insurance company paid citizens as much as 32 million KM in claims in 2015, allocated 12 million KM for employee salaries, and set aside about five million KM for taxes and contributions that went to the federal treasury. 

Sarajevo-osiguranje also has about 15 million KM in deposits in bank accounts!

This insurance company also has several related companies, which also generate millions in annual turnover. "OSING-osiguranje inženjering. d.o.o. Sarajevo" is a company that is 100 percent owned by Sarajevo-osiguranje. 
It involves seven technical inspection stations of the group, which generate an annual turnover of about five million KM. A car dealership in Travnik, 80 percent owned by Sarajevo-osiguranje, also generates an annual turnover of about half a million KM. 

Associated with Sarajevo-osiguranje is also the company „Bosna Re“ (Sarajevo-osiguranje holds 12.5 percent of shares in this company). The stock market value of this company's shares is about one million KM.

Government critics warn that SDA and HDZ BiH have been destroying companies using the same pattern for years - first devaluing their worth through false accounting, then selling them to pre-arranged buyers with whom a deal has been struck. 

Besides Sarajevo-osiguranje, the ministers of SDA and HDZ BiH in June last year (DF ministers resigned because they disagreed, among other things, with this method of plundering state assets) made a decision that the Government would sell more companies this year, including FDS and Bosnalijek. 

The sale of Sarajevo-osiguranje is timed with the abrupt resignation of Adnan Delić from the position of Director of the FBIH Insurance Supervision Agency. Delić was elected to this position in November 2014 for a four-year term. Although the Agency's work report was adopted by the Government and assessed positively, Delić resigned „in peace and quiet.“ 

This is an agreed resignation, and Delić will be appointed to another position. In his place, a cadre of HDZ BiH (a loyal man of Dragan Čović), Dinko Musulin, the former Chairman of the Management Board of the insurance company Euroherc, has been appointed. 
This is a „swap“ of positions arranged by SDA and HDZ. SDA ceded the FBIH Insurance Supervision Agency to HDZ, and HDZ handed over the FBIH Banking Agency to SDA. Economist Edin Hukić is mentioned as a candidate for the FBIH Banking Agency. Unofficially, he is the nephew of the director of BBI Bank, Amer Bukvić. 

Coalition SDA-SBB under test 

The decision was opposed by SBB leader Fahrudin Radončić, demanding that the coalition partner SDA stop the sale of public companies. 

The request has been complied with for now, the sale has been postponed, and the SDA-SBB coalition is under test. The coalition could easily collapse if SDA persists with the already agreed sale, and SBB with its demands.