CIN-CG & VIJESTI INVESTIGATION ABOUT THE ATLAS AFFAIR: Ban and Mihailovic- Djukanovic’s €1.5 million worth friends

Zeljko Mihailovic and Dusan Ban are Milo Djukanovic’s mysterious friends who had formally provided a cash collateral of a million and a half so that he could get a loan from London branch office of Piraeus Bank. They issued a statement wherein they admitted their "help" and sent it to several media outlets. The statement was prompted by earlier CIN-CG & Vijesti questions sent to them to confirm or deny their role.

Moreover, Capital Invest LLC, a company of Milo Djukanovic, added that Dusko Knezevic was the loan guarantor only in its "technical sense". Dusko Knezevic, president of Atlas Group is wanted by Montenegro’s Special Prosecution Office for setting up a criminal organisation, as they say.

Knezevic confirmed to CIN-CG & Vijesti that the money of Mihailovic and Ban was used as cash collateral for the loan granted to Djukanovic. They signed an agency contract for investment No 4062/07 on 12 June 2007 whereby Mihailovic and Ban took upon themselves to transfer €1.5 million to Cyprus-based Comsel Limited represented by its director Dusko Knezevic.

Later on, as we have already reported, Comsel Limited turned up as a formal guarantor for the loan of €1.5 million granted by Piraeus Bank’s branch office in London, whereby Djukanovic made his business clean and became one of the owners of Prva Bank.

Timeline of the loan approval

Here’s how the things were done for Djukanovic.

First in early June 2007 a contract for investment is signed between Comsel Limited on the one side and Zeljko Mihailovic and Dusan Ban on the other side. Thereby Comsel Limited became the Agent who was to represent Mihailovic and Ban as “Principal Investors“ in the Montenegrin stock market. Nonetheless, the money was not used as purported but to secure a loan for Djukanovic in London.

The "friends" transferred money to the Cyprus account of Comsel Limited at Laiki Bank on 21 June 2007. A fortnight later, on 4 July, Comsel Ltd. moved the money to its account in London (branch office of Piraeus Bank). On 11 July 2007 Comsel Ltd. signed the guarantee agreement with Piraeus Bank and the cash collateral provided to Capital Invest represented by Milo Djukanovic. On the same date Djukanovic signed the loan agreement with Piraeus Bank on behalf of Capital Invest. The loan amount was €1.5 million – just as much as the cash collateral.

The strange logic of Djukanovic's money borrowing

CIN-CG &Vijesti tried to obtain comments from the president on why he was hiding that Ban and Mihailovic had provided cash collateral for him. However, Djukanovic maintained his silence, just like in other cases before.

The judiciary in Montenegro doesn’t dare to investigate why Djukanovic used Dusko Knezevic and his companies for “technical-administrative support“ as the president’s people tried to explain away the whole thing.

How come that Ban and Mihailovic wouldn't turn up to directly guarantee for their “true friend“ before Piraeus Bank in London?

Why go all the way from Montenegro to Cyprus and on to London and back??? They could have given money straight to Capital Invest (of President Djukanovic) so that he could purchase shares of Prva Bank later on. No doubt, it would have been a way cheaper! Djukanovic would not have payed interest to the bank in London. He also would not have used agent services of his “acquaintance“ Knezevic, as he called him, and everything would have stayed between the “true friends“, as Djukanovic, Mihailovic and Ban call each other.

This whole scheme obviously points to an attempt to conceal the origin of money which was used as cash collateral. The contract that Comsel Ltd. signed with Ban and Mihailovic was obviously a sham as the money ended up as cash collateral in England instead of being invested in Montenegro as purported in the contract.

In any normal country this would beg the obvious questions- why Djukanovic hid that transaction and the roles of Zeljko Mihailovic, Dusan Ban and Dusko Knezevic?

When the current president was asked in parliament some years ago about his loan he retorted that the loan was granted on the basis of his reputation and honour and he stated that there had been “no cash collateral on my part“. How to explain all this???

Friends from the 90s -cigarette transit business and Subotic liks  

Dusan Ban and Zeljko Mihailovic have been entrusted the most sensitive (and lucrative) businesses since the 90s. Back then they were running the Montenegro branch office of Subotic’s MIA company. Stanko Subotic Cane is a controversial businessman from Serbia and a close friend of Djukanovic. According to already published documents, the branch office was founded in Montenegro in 1994 under No FI-2464/1. One year later the company was granted permission by the Djukanovic led government to open customs warehouse and duty free shop in the Port of Bar.

Many testimonies of those years assert that the primary business of MIA was the so called “transit of cigarettes“ which brought in the loads of money. A part of the money went to Montenegro’s budget to counter its deficits while a substantial part ended up with the key players in that line of work thereby making them filthy rich. The later is also corroborated by many testimonies.

Nacional, a Croatian weekly whose owner Ivo Pukanic was later killed, published an insider witness account some fifteen years ago. The insider was Srecko Kestner, a Montenegrin businessman who claimed that Djukanovic’s best men, Dusko Ban and Zeljko Mihailovic as MIA executives were collecting cigarette transit tax  “in bags of cash- literally speaking“. Kestner said that 35% of MIA’s profit went to him, 15% went to “Djukanovic’s best men“ while the remaining 50% went to Stanko Cane Subotic. Kestner also claimed that Djukanovic himself was receiving a commission of $10 per smuggled cigarette box. He further says that it was impossible to count all the money that thus arrived, He added than any rough estimate would have a margin error of some 50 million. All the company's documents had been destroyed according to Kestner.

Djukanović and Subotic denied the allegations. Recently the age long trial in Italy over cigarette smuggling was finally completed. Many defendants have been acquitted either due to statute of limitations or for lack of evidence. Stanko Subotic was acquitted earlier while Djukanovic’s file was archived years ago after he appealed to diplomatic immunity.

Dusko Knezevic spoke out from London after he parted ways with Montenegro’s president. He said that the controversial million and a half arrived to his company’s account from Djukanovic’s camaraderies from the days of shady cigarette businesses. The recently released documents show that Knezevic's task was to wrap up the financial schemes so that they appear to comply with international banking standards. Knezevic is a rare insider who had the knowledge to do it. Moreover, he had companies abroad which could manage those confidential transactions.

He announced that he would continue to release confidential documents in the coming weeks. He already released details about Djukanovic’s lavish private spending in the Emirates that he had to pay for, the president’s sizable private credit card debt that he had to cover for etc. Knezevic heralds the release of documents related to the Telecom Affair (investigated by the US Securities and Exchange Commission), A2A (Russo-Italian energy company that had business with the ruling Djukanovic family) and other businesses where the key partner was none other than the current President of Montenegro.

The government-owned Maritime Transport - a gift for “true friends“

After the cigarette business  Zeljko Mihailovic, Dusan Ban and his brother Dejan Ban continued to flourish in other business endeavours. They laid hold of the very profitable government-owned company Maritime Transport. It literary happened overnight. The Djukanovic led government extracted the company from the assets of the Retirement and Disability Insurance Fund (RDI) in August 2004. The RDI Fund’s executive then was none other than the current Central Bank governor Radoje Zugic, known for his role in many affairs. He offered the company’s control stock of shares in the stock market without prior notice in the middle of summer holidays. The Ban brothers and Zeljko Mihailovic were already waiting. Their Prohouse LLC swiftly purchased the control stock for merely €1.2 million. The payment was made in old foreign currency savings bonds which had been purchased at high discount rate. At the time, the Maritime Transport had an annual turnover of €2.5 million, its profit stood at half a million euros while there was a way more money on its demand deposit. Thus the very profitable company was basically sold for peanuts.

The company has enjoyed the state imposed monopoly since its beginning. It exclusively operates the ferry route across the Bay of Kotor. The ongoing state monopoly ensures a sizable profit to the new owners and millions end up in their pockets. The declared profit in 2017 amounted to €2 million.

The Maritime Transport is owned by Dejan Ban (33.4%), Prohouse LLC of his brother Dusan (44.2%) and Prohouse Montenegro LLC of Zeljko Mihailovic (22.2%). Nonetheless, Prohouse and Prohouse Montenegro have another lucrative business with the government of Montenegro. They lease office space in Podgorica to the government at an exorbitant price which brings them tens of thousands of euros each year.

If everything was clean why Djukanovic hid his friends

Why Ban and Mihailovic were hidden behind Knezevic and his Cyprus-based company? In 2007 they were already legitimate and profitable thanks to the Maritime Transport LLC. The hiding behind Knezevic begs many questions.

Was the money really theirs? Or was it in fact the money of Djukanovic himself hence the whole operation to conceal Djukanovic’s funds?

Dusko Knezevic revealed that the Montenegrin president was taking a cut for himself in many privatisation deals of the state-owned enterprises. Does Djukanovic also have a share in the Maritime Transport since Ban and Mihailovic took it over under very favourable terms at the time when Djukanovic was Montenegro’s prime minister???

Djukanovic used the loan granted by Piraeus Bank to buy shares of Prva Bank though his Capital Invest LLC. On 3 Aug 2007 he obtained the bank’s shares at the privileged price of €127 each via recapitalisation. The stock exchange price on the very same day was considerably higher- €188. One year on Djukanovic pays back his loan by selling a smaller part of his shares at the whopping price of €610 each (2,540 shares) thus collecting €1.55 million. That was the exact amount needed to pay everything back including the interest!

Dusan Ban opens his soul but claims that the money is legitimate and that Knezevic still owes him

Dusan Ban replied the questions sent by CIN-CG & Vijesti and further distributed his replies to other media. He admitted that, together with his friend and business partner Zeljko Mihailovic, they signed an investment contract with Comsel Limited (of Dusko Knezevic) upon which they transferred €1.5 million to his account. “That money was used as collateral for the said loan with our consent. However, after 20 days, the collateral was not required anymore“ claimed Ban.

The truth is that the contract with Knezevic was signed on 12 June 2007 whereas Djukanovic signed the loan agreement on 11 July 2007. Furthermore, he purchased the shares in August 2007 and the shares were written into the Pledge Register in October 2007.

Dusan Ban further elaborates that after eleven and a half years since the transaction they still haven’t received all their money back. Allegedly he talked to Knezevic on when and how he would return the outstanding amount but it was all in vain. “The truth is that Dusko Knezevic received the money from the accounts in our names, from a reputable bank in a European country with the top banking reputation. Our businesses are not restricted to Montenegro only but a way beyond its borders and we are fully legitimate abroad“ continues Ban in his response.

Being asked how come they didn’t provide that loan to their friend directly he says that “the answer to the question is very simple. At the time when our friend reached out to us the loan agreement with Piraeus Bank was already arranged. Since we were not the bank’s clients at the time it made more sense to send the money to Knezevic who had the account with the said bank“ said Ban.

However the truth is that they signed the contract with Knezevic on 12 June while the loan was agreed upon one month later. Or perhaps the whole network of transactions wherefrom Djukanovic profited immensely had been arranged a long time ago?!

Goran KAPOR – Milka TADIĆ-MIJOVIĆ