SDA hands over insurance sector to HDZ, Delic's resignation agreed

The government of Prime Minister Fadil Novalic does not seem willing to give upon the sale of some 45% of its own shares in Sarajevo-osiguranje (Sarajevo Insurance company) even though that is the biggest national insurance company that has proven a lucrative business too.

Novalic has tried to justify the sale by saying that the company is not any 'state treasure'. On the contrary, the Prime Minister says, Sarajevo osiguranje has had a loss of 31 million KM and it has not paid one single KM to the federal budget for a number of years. If the government sells its shares in this insurance company, the proceeds will go into the retirement fund, Novalic claims.

Novalic has been trying for months to convince the citizens of Federation that they have no use whatsoever of Sarajevo-Osiguranje.

The object of sale at the end of June 2016 was 2,108,469 government shares in Sarajevo-osiguranje. The original price was 12.99 KM per share, however, it was swiftly reduced to 10.39 KM.

As the first two sales saw failure, the price of shares could drop even more. Therefore, should the government's share in the company be sold at the current price, Federal Retirement Fund would benefit with some 20 million KM.

Considering their monthly requirements of app. 160 million KM for pensions, this seems a drop in the ocean. One may conclude that only individuals who designed this plan will benefit from the sale.

Sarajevo-osiguranje finance reports we have acquired, reveal the situation quite different from that presented by Novalic.  The company is worth several times more than 20 million KM that the government would get from its sale. The value of company assets is app. 50 million KM!

Last year, the company had about 400 staff. The portfolio of the business group for 2015 was in the range of 65 million KM.

From that, this insurance company paid out to the citizens 32 million KM on the account of damages, 12 million KM for staff salaries, and 5 million KM to the federal budget for taxes and benefits.

Sarajevo osiguranje has got about 15 million KM of bank deposit!

The company also has several subsidiaries with revenues in millions KM. 'OSING-osiguranje inženjering d.o.o. Sarajevo' is wholly owned subsidiary, which owns 7 technical examination stations with annual revenues of app. 5 million KM. 'Auto kuca' in Travnik, also a subsidiary (80%), has its annual revenues up to 5 million KM.

Another subsidiary is 'Bosna Re' (12.5%) with stock value of app. 1 million KM.

Analysts claim that SDA and HDZ BiH have been destroying BH companies in this manner for years: First they reduce the company value through false accounting, after which they sell it to known buyers with whom they have a secret arrangement.

In addition to Sarajevo-osiguranje, SDA and HDZ BiH ministers made a decision in June last year (DF ministers resigned as they refused to participate in destruction of the state assets) to sell even more companies this year, inter alia Tobacco Factory Sarajevo (FDS) and Bosnalijek.

The sale of Sarajevo-osiguranje is timed with a sudden resignation of Adnan Delic from the position of Director of Agency for Insurance Supervision FBiH. Delic was appointed to the position in November 2014 for a 4-year term. Although the government adopted the agency's report as positive, Delic resigned in 'peace and quiet'.

That was a previously agreed resignation, and Delic will have been appointed to some other position. His seat was filled by HDZ BiH person (loyal to Dragan Covic), who previously served as President of Board of Euroherc, Dinko Musulin.

That was an 'exchange' of positions agreed between SDA and HDZ. SDA let HDZ have Agency for Insurance Supervision FBiH, and HDZ let SDA have Agency for Banking FBiH. There is a mention of Edin Hukic as a candidate for the top position with the Agency for Banking. Unofficialy, he is a relative of BBI Director Amer Bukvic.

Challenge before coalition SDA-SBB

SBB leader Fahrudin Radoncic opposed the decision and requested his coalition partner SDA to stop the sale of public companies.

So far, his request has been met - the sale has been postponed.

Would the coalition survive if SDA pursued the sale and SBB held on to their principles?