RS Government’s Property Used as Collateral for Private Firm’s Debt

Monday January 6th, 2020
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The RS government recently lost out on a chance to acquire a title to a condo in Bijeljina which it paid outside the procedure for a veteran MP Milica Marković 19 years ago. The revenue institutions might seize the opportunity to collect debts of a private firm by selling the condo.

condo in Bijeljina

The RS government lost out on a chance to acquire a title to a 125-square meter condo in Bijeljina paid with taxpayer funds. (Photo: CIN)

By The Center for Investigative Reporting

A private firm Welting holds a title to a five-room condo in Bijeljina which belonged to Milica Marković until last March. Indirect Taxation Authority of Bosnia and Herzegovina (BiH) and Republika Srpska (RS) Tax Authority have foreclosed on the property because of Welting’s tax debts.

Nineteenth years ago, then Prime Minister Milorad Dodik ordered the RS government to pay the apartment with fuel oil from stockholding supplies on behalf of Marković, as the Center for Investigative Reporting earlier reported.

After CIN published its story, in March 2019, the RS Supreme Court put an end to eight years of court proceedings in which Marković had sought the ownership of the condo. The court ruled how the condo was paid in full with taxpayer funds and she could not claim ownership. However, ten months later the RS government’s official still did not claim title to the condo. The revenue institutions eventually might sell the property to recoup Welting’s tax debts.

Welting’s attorney Miodrag Stojanović said that the firm offered the condo to the RS Government 12 years ago, but the government didn’t take over the property even after the final and binding verdict. “Welting was paid for the condo and has nothing more with it,” said Stojanović.

Officials from the RS Ministry of Tourism and Trade could not tell reporters why the government didn’t seek to make its claim official. Instead, they referred CIN reporters to the Office of RS Attorney General which is in charge of government’s legal and property claims.

The RS Attorney General’s Office stated that the finance and tourism ministries, authorized to file requests on government’s behalf were informed about the ruling “in due course”, but neither sought to initiate the transfer of the title.

Indirect Taxation Authority foreclosed on the 125-square meter condo in downtown Bijeljina in October 2019, while the RS Tax Administration did the same a month ago.

Taxpayers Paid Dearly for Condo

In mid-2000, Marković, then a legislator with the Serb National Alliance in the Republika Srpska (RS) National Assembly, asked Prime Minister Dodik to have the RS government pay for her condo.

In Bijeljina she found a private construction firm Welting with which it signed a contract. It stated that she was going to pay for the condo, even though she had already known that she was not going to give her money. The RS Stockholding Agency together with a Bijeljina-based state enterprise Drina paid the money stated in the contract — nearly 150,000 KM.

The agency gave Drina fuel oil which corresponded to the price of the flat. The RS government gave the fuel oil to Drina as a donation and promptly wired money to the Agency. Drina accounted for it as a purchase yet to be paid, even though it didn’t need to pay for it. Following an already established plan, Drina was supposed to wire the money to Welting’s accounts. Thus the agency assigned its receivables from Drina to Welting and Drina paid the value of fuel oil to Welting instead of to the agency.

Drina’s accounting stated that they paid for the fuel oil, while Welting stated on its accounts that the price of Marković’s apartment was balanced. Welting provided Marković with a fake receipt as if she had paid for the condo.

These events surrounding the Bijeljina flat resulted in nine rulings before the RS courts.

“We did as we were instructed by the one who had money,” told CIN Mirko Nožica, then head of the agency. He said that Dodik asked him to do this. Dodik refused to talk with CIN. During one trial, Dodik testified that he had ordered the use of fuel oil to pay for Marković’s flat.

In 2013, Marković sued Welting before the Basic Court in Bijeljina asking that the title to the condo be transferred in her name. The court threw out her lawsuit. In 2015, the District Court in Bijeljina overturned that decision and ruled that Marković had a right to the condo. Due to the verdict, Marković managed to claim deed of the condo. The RS Supreme Court subsequently threw out the verdict and ordered retrial. Then a new round of the fight over the ownership of the condo started again.

According to the Supreme Court’s last March decision, Marković has no right to the apartment and this is a final and binding decision. The RS government could have claimed the title over the condo but failed to do so.

 

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The Center for Investigative Reporting in Sarajevo (CIN) work is available for free to all organizations that credit CIN as their source and link to www.cin.ba.

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