AN UNFINISHED STORY OF CORRUPTION: Court prohibited yielding possession of Vitezit to Zubak

Arbitrary and interest-oriented interpretations of legal provisions continue to be a characteristic of the insolvency proceedings of the dedicated industry factory Vitezit. A conclusion was adopted at the session of Creditors’ Committee, held on February 7, to hand over possession of Vitezit’s property to the buyer, company “WDG Promet” from Zagreb, which is owned by Matias Zubak, the son of the Croatian arms dealer Zvonko Zubak.

The committee wasn’t bothered by the fact that the Land Registry Office of the Municipal Court in Travnik had dismissed the Decision awarding ownership, which would have registered “WDG Promet” as the owner of the purchased Vitezit’s property. The state is the owner in the land registers, and Vitezit is only the user. At the same time, the Office was not provided with a tax payment certificate, and the list of parcels differs from what was sold to the buyer according to the advertisement. The Office of the Attorney General of BiH has also taken the stance that this is a case of state property sale, which is contrary to the Law on the Prohibition of Disposal of State Property, passed by the Office of the High Representative.

The Chairman of the Creditors’ Committee, Adil Lozo, who, together with the bankruptcy trustee, is an ardent advocate for Vitezit to be handed over to the buyer as soon as possible, asserted that this was a deliberate obstruction by the representatives of the state authorities!

“It is my opinion that according to the mentioned legal provision we are obligated to hand over possession of the property to the buyer so that the buyer could then take over the purchased property and subsequently conduct procedures concerning the tax payment, registration in the public records…” said Lozo at the session.  

Zlatan Bilanović, as a representative of the Government and the Ministry of Energy, Mining and Industry of the FBiH, opposed the handover of the property for the clear reason that the buyer is still not registered as the owner of the real estate in the land register. As a result, Bilanović had at one point announced that he would leave the session of the Committee.

The bankruptcy trustee went a step further and requested the adoption of a decision requesting the Federation Government to revoke the consent on registration of Vitezit’s status change from April 16, 2020. That consent, as a condition for approving the insolvency proceedings, implied restructuring of Vitezit, not the sale!

It is significant that there are no details about the content of that decision in the minutes of the meeting. The committee adopted the decision unanimously, but its members Vlatka Mlakić, Mirnes Trako and Zlatan Bilanović had with a “hindsight” submitted a letter to the bankruptcy judge withdrawing their vote cast at the session of the Creditors' Committee.

Letter withdrawing the votes

Although he was at the session, the bankruptcy judge Ivo Žabić reacted later. He ordered the bankruptcy trustee, Behrija Huseinbegović, not to take any actions to hand over the possession to the buyer “WDG Promet” before it is registered as the owner of the property in the land register, that is, before it receives a written consent from the FBiH Government on the manner and conditions under which the property, which is used for dedicated production, will be handed over!

Adil Lozo was particularly exasperated by the decision of the bankruptcy judge, who then, in the role of legal representative of one of the bankruptcy creditors, assured the judge in a letter that the procedure of registering the property cannot be linked to the obligation to hand over the purchased property!

“Even a nonowner can be the holder of the property and enjoy tenure security if it is a peaceful possession”, claims Lozo’s law firm.

Other creditors were not without reactions, but these were quite the contrary to the Huseinbegović-Lozo duo. Velimir Didak informed the bankruptcy judge that the creditors were misled by the bankruptcy trustee’s disinformation.

Žurnal has already reported that the Federation Police Administration has been conducting an investigation and extensive questioning concerning Vitezit since the beginning of the year. One of the creditors who filed several criminal complaints with prosecutors and police agencies with allegations of criminal activities and possible corruption in the insolvency proceedings is the director of the company “Grom L” Mario Lujić.

“They offered me everything, but also repeatedly threatened me to stop revealing this crime, but I will not stop, whatever the price may be”, said Lujić for Žurnal.

It is not only domestic stakeholders who are writing to the local judicial institutions. A petition was submitted to the Municipal Court of Travnik seeking determination of a temporary measure to prohibit the disposal of funds and to identify the assets due to the suspicion of embezzlement, fraud and money laundering in the process of purchasing Vitezit.

The Czech fund “Podnikatelská družstevní zálazna”, through which EUR 5.5 million was paid for the purchase of Vitezit, is requesting that this money be blocked due to the suspicion that the money originates from Ukraine, stating that Zubaks, i.e. “WDG Promet”, had deceived the Ministry of Defense there by not delivering the contracted weapons, and using the advance payment to buy Vitezit, which was also reported by Žurnal.

Matias Zubak registered a company with the same name in the Czech Republic at the end of January. His partner is Marek Pernička. The Žurnal’s sources state that he is the son of Petar Pernička, an arms dealer from the Czech Republic, an old associate of Matias’ father Zvonko Zubak.

Pernička owned the company “Winsley Finance Limited” registered in the Virgin Islands, and the representative for Croatia was Zvonko Zubak. Zubak also registered the company “Winsley Defense Group” in BiH. Pernička delivered a part of the S-300 missile system to Croatia during the war. Although the system was not completed, Pernička asked Croatia for 200 million dollars through Zubak after the war. He was then tried for a long time in the Czech Republic on suspicion that he wanted to resell those missiles to Iran via Croatia, and he was also tried for the intention to sell a squadron of MiG-21 type airplanes to North Korea via Russia. Those planes were seized, and according to media reports, the USA imposed sanctions on Pernička and his company and banned trade with the USA.

Coincidentally or not, Matias Zubak, the director of WDG Vitez, Josip Raić, the former director of Vitezit, and Dragan Blaž, one of the “controversial businessmen” of whom Žurnal wrote, were seen together in a restaurant in Vitez a few days ago. For the sake of illustration, when a prosecutor was asked if the investigation is for a case in which Blaž’s involvement is mentioned, he answered “that he is the one”.

We will cover their future projects on another occasion, but it is evident that they have common topics, knowing that Blaž is in a full swing to purchase buildings and also do construction projects on the Vitezit’s land.

More than four years have passed since the opening of insolvency proceedings in Vitezit, and there is still a dilemma whether the subject of sale is the company Vitezit or only assets in the form of land and buildings. Let us remind you that the bankruptcy administration brought annexes to the sales contract several times, that there were actually two concurrent buyers; that the old stocks of gunpowder were to be sold to a “dummy” company from Zenica for nothing. The bankruptcy trustee failed to submit timely information to the competent court; suspicious contracts were concluded on the production of gunpowder. She isn’t answering Žurrnal’s questions.

An entirely separate story are numerous, but still uninvestigated, crimes that happened before the insolvency proceedings, the theft of equipment and even entire plants that were resold to Serbia and Iran, which is subject of Žurnal’s reporting for many years now. In any case, Vitezit is an unfinished story of corruption.

(zurnal