Reports confirm government findings in National Savings Bank case

Belgrade, Feb 19, 2004 - Serbian Minister of Finance and Economy Bozidar Djelic said on Thursday that reports from the National Bank of Serbia (NBS), the Ministry of Finance and Economy, and the Anti-Money Laundering Office have confirmed earlier findings of the Serbian government that the National Savings Bank (NS) is majority owned by firms controlled by some off-shore companies and that the recapitalisation did not increase NS's potential in real terms.

Djelic told a press conference that initial estimates have revealed that the state should hold at least 65 percent of NS's capital, even without possible cancellations of previous recapitalisations. The state's equity should be valued through NS's equipment, buildings, monopoly over the repayment of old hard currency savings, and the very name of the bank, which implies that the organisation is backed by the state.

Djelic also said that NBS's deposits with the Moscow-based EuroAxis bank have been spent illegitimately, adding that $20 million was spent on electricity imports, while another $10 million was used for oil imports, though neither was for the needs of Serbia's state-run power utility EPS or oil company NIS.

Also, the only energy supplier that has any business relations with the EuroAxis bank is the London-based Energy Financing Team (EFT), which is controlled by some of the NS's stakeholders, said Djelic.

At the same conference, Serbian Deputy Minister of Energy and Mining Nikola Nikolic said that the government has dismissed Ljubomir Geric as general manager of EPS over irregularities in electricity imports from the EFT as well as bad management of the state power utility. Nikolic also accused Geric of favouring EFT over EPS's other business partners.