Monitor Weekly, 25 March 2011

Heroes of Montenegrin Transition – Dragan Brkovic

Government of Igor Luksic 1 keeps doing business the Djukanovic 2 way. It

supported Dragan Brkovic 3 by giving Vektra three more years to fulfill
its commitment to invest in hotels in Herceg Novi, which are decaying since
Brkovic privatised them.

„Who is this Mr Brkovic to give him another chance, who is prolonging the
agony which lasts three years "asked the representatives of an NGO from Herceg
Novi.

BEST MAN: Who is Dragan Brkovic? A friend and best man of Milo Djukanovic.
Through a variety of transactions - from aluminum to timber – he seized hundreds
of millions of euros, hundreds of thousands of square meters of land in most
beautiful locations and tens of thousands of square meters of residential and office
space. From Herceg Novi to Pljevlja.

Extension of deadline for investment is a triviality, compared to what the country

gave Brkovic in the past Djukanovic's twenty years. Trifle compared to how
many hundreds of millions Brkovic needs to pull-out his empire from bankruptcy.

Almost everything that he acquired is now under mortgage. Brković withdrew most of
200 millions of loans obtained from OTP, CKB, Hypo Alpe Adria, NLB and other banks.
His airplane was recently confiscated in Germany because Vektra did not pay loans to
the Austrian Hypo Alpe Adria Bank. He also has problems with other loans.

Where is all this money? How did Brkovic manage to ruin practically everything - so
many credits, so many hotels and businesses that were filling the Montenegrin budget
in the past. Ignorance, megalomania? Or, is it that wicked model – privatise, then use
such property as collateral for loans, withdraw the money but do not invest it, and when
all the deadlines expire, return to the state the destroyed properties and - your debts.

1
Prime Minister of Montenegro since December 2010
2
Milo Djukanovic, Prime Minister or President of Montenegro 1991 - 2010
3
Montenegrin tycoon, owner of company Vektra
He began quietly. "I was rich in Tito's Yugoslavia", he said during the dispute with
Nebojsa Medojevic 4. Wealth is a relative thing. Dragan Brkovic was a worker in
Yugoslavia, a seller of car parts in a modest store “Equipment”, in Podgorica’s suburb
Pobrežje. Wealth grew as yeast only when he got the monopoly in aluminium trading.
The secret is how he deserved it - as an expert in auto parts, or as a friend of Milo
Djukanovic
The formula for getting rich was simple - during the UN imposed sanctions, Brković had
the exclusive right to acquire the aluminium metal, a stock commodity, from the
Aluminium Combine. He would pay it in worthless dinars, and sell the aluminium for
dollars, at market price. The more aluminium he took, the more the Aluminium Combine
owed him. The whole business was presented as a heroic act, since the sanctions
busting supposedly saved the Aluminium Combine.

Our Robin Hood, while the country languished, earned his first millions. And millions,
like millions, just multiplied.

CREDITOR:,,I have invested in the Aluminium Combine when everybody had left it”, he
used to lament. How did he invest? Brkovic operated through the Swiss company
Glencore. At the end, before the company’s privatisation in 2005, it turned out that the
Alumium Combine owed hundreds of millions, mostly to Brkovic. The Combine also
owed to other public companies – electricity utility EPCG, Bauxite mine ... But, under
the privatisation contract, Vektra, Glencore and Standard Bank were the privileged
foreign creditors. The new owner had to pay them immediately.

“It’s not a problem if Brkovic and Vektra protect their interests as creditors. The problem
is when the debt owed to EPCG and the Bauxite mine is being deferred for 15-16 years
with no interest, while Vektra obtains a privileged international status and gets
immediately repaid her debt. I cannot understand how can the Government protect
some and dicriminate others " warned Zarko Rakcevic 5.

In vain. The relationship between the Government and Brkovic has not changed: it is
always to the detriment of the society. In parallel with the aluminium, Brkovic traded in
apartments and business premises. He erected a building in an exclusive Podgorica
location and sold most of its premises to the Government. At a four times higher price
than those prevailing on the market.

4
Leader of the opposition party Movement for Change
5
Former politician, now businessman and coordinator of NGO Forum 2010
DEVELOPER: It is known that in this building Milo Djukanovic’s son has over 400
square meters of office space, which he got as a gift from his uncle Aco 6. And how did
Aco earn it? Does this real estate worth millions has something to do with the high price
that Milo Djukanovic’s government paid Vektra for the building?
Insiders from the nineties say that Dragan Brkovic worked long for both Milo Djukanovic
and Momir Bulatovic 7. He later opted for Milo, who had more sense for business and
less for patriotic Serbian epics. They claim that the devil broke in the DPS less because
of Slobodan Milosevic 8, and much more due to the splitting of cakes, especially the
privilege to trade in aluminum. It is around this issue, they say, that actually argued
Bulatovic and Djukanovic, for whose interests Brkovic continued to work.

Brkovic was not pleased when Djukanovic found a new partner in 2005. The Aluminium
Combine was handed over to an offshore company associated with Oleg Deripaska 9,
whose ownership structure is a secret. However, Dragan was quickly reassured. He got
the pearl - HTP Boka 10. Was it a compensation? He assumed control over the most
beautiful locations and hotels in Herceg Novi - Plaza, Igalo, Tamaris and the old hotel
Boka...
Brkovic paid 21 million for HTP Boka. He committed to invest additional 64 million in the
first two years. "All the hotels will have five stars, because Vektra does not know how to
do it in other ways" he promised. He also announced that he will invest around half a
billion. We can see. HTP Boka used to employ 600-1000 workers, and now has less
than 200. Some hotels have been demolished and those that still function do not meet
even the three stars standard. But if stars are missing, the square meters aren’t.

LANDOWNER: According to the cadaster, Vektra Boka has in Herceg Novi 128 167
square meters of land and 25 402 square meters of business and residential space.
Brkovic acquired the complex in Herceg Novi during the boom, when prices per square
meter of land rose and reached hundreds of euros, and those of residential and office
space amounted several thousand euros. If all this would be added, Brkovic only in

6
Milo Djukanovic’s brother and one of richest Montenegrin businessmen
7
Montenegrin President and Chairman of the ruling Democratic Party of Socialists (DPS), 1990
– 1997, strong supporter of Slobodan Milosevic
8
Serbian leader in the nineties when Serbia and Montenegro formed Federal Republic of
Yugoslavia
9
Well known Russian oligarch
10
Hotel company, owner and operator of several hotels in the coastal city of Herceg Novi
Herceg Novi got close to 100 million euros.

In Budva, as well, through privatisation and decisions of state organs, this Montenegrin
godfather has amassed new tens of millions of euros and thousands of square meters.
According to cadastral records, Vektra Montenegro has more than 200 lots in the
tourism capital, more than 33,000 square meters, and thousands and thousands of
square meters in various objects. In the most beautiful place on the bank of the Old
City, he bought from Nenad Djordjevic 11 the former building of the Yugoslav River
Transport, of several thousand square meters. In Becici, Vektra occupies the entire
complex, formerly known as the International Youth Centre, which has tens of
thousands of square meters of land and buildings.
Brkovic did not invest either there or in Herceg Novi. But he raised hundreds of millions
of loans from domestic and foreign banks on the basis of this property
In Bar, Dragan Brkovic privatised the former Rumijatrans, whose trucks in the early
years served Brkovic for the transport of aluminum and other commodities. He also
acquired the Moračatrans. He merged these companies, gave them a fancy name
Horizon Logistics, which he liquidated immediately thereafter. The workers were left
jobless, but our Robin Hood, besides trucks, has managed to keep some real estate.

In Bar, Brkovic has 42 733 square meters of land and 9846 square meters of residential
and business premises, including some electrical power equipment. Most of the objects
were acquired through decisions of state authorities. In Bar, again, he has perfect
locations. And there, as well, everything is under mortgage.
CONCESSIONAIRE: In Podgorica, Dragan Brkovic, according to cadastral records, has
25 279 square meters of land and 1191 square meters of office and residential space.
He purchased some, while the rest was ceded to him by decisions of state authorities.
In Montenegro's capital, his Vektra has 51 830 square meters of land and 8034 square
meters of residential and office space. Here again, some of it was purchased, while the
rest was acquired "through legislative acts".

In the North, in Pljevlja, after the 2006 referendum for independence, Brkovic bought
for 1.6 million the Jakić Corporation, the biggest Montenegrin timber industry. The
purchase was conditioned by a 30 year concession to Vektra, involving huge areas of
forest, 13 farms and 140,000 cubic meters of wood per year. According to estimates,
this amount is equal to the annual Montenegrin exports of timber products. The Forest
Management Authority awarded the forest concession to Vektra although the
competitor’s PV company’s bid was higher by 20 million euros

11
Former Serbian politician, now businessman
In Pljevlja, immediately after the privatisation, he promised the revival. "This year we will
start with a 25 million investment ..." and that it would be on the principle of sustainable
development – whatever is cut would be replanted. But who controls that?
He also promised to establish in Pljevlja a "development center of national importance."
None of that happened. Instead of Brkovic, the investor in Pljevlja has been the Saric
family 12.

Jakic is in trouble these days, as Brkovic has pawned the property there as well. And he
had a plenty of it. In addition to the concession for exploitation of forests, Vektra
Montenegro has in Pljevlja 220,000 square meters of land and 6,000 square meters of
business and residential space.

THE AVIATOR: Like other transition heroes, Dragan Brkovic operates through various
companies: Vektra Montenegro, Vektra Jakic, Vektra Boka, Vektra Development,
Horizon Logistics, Vektra Water, Vektra Milan and so on. On various addresses, from
Pljevlja to Virgin Islands. It is difficult to trace how much property this chain of
companies actually owns.

Monitor reported in an earlier article that Dragan Brkovic has over 38 000 square meters
of land in Bjelasica, at the location where the notables are concentrated - from Aco
Djukanovic up to Stanko Subotic Cane 13. Although under mortgage, Vektra has
guaranteed with that property to the government that it will fulfill within three years its
commitments to the HTP Boka.

On Bjelasica, Vektra Development and two other companies that Brkovic acquired own
161,485 square meters - of business and power facilities, public roads and pastures. At
the Real Estate Agency, there is no information how they compiled the property. In
Zabljak, Brković’s presence is symbolic. Vektra Montenegro has purchased a building of
only 784 square meters and some 3,000 square meters of land.

If all this were assembled in one place, Dragan Brkovic owns in Montenegro a territory
of a medium sized city. His facilities could accommodate thousands of people.
And it's not all. In addition to tourism, housing construction, road transport, Brkovic has
an airline company with three passenger aircrafts and a helicopter. He has a firm for
bottling water. He used to own the anode producing company Anotech, in the courtyard
of the Aluminium Combine, registered in the Virgin Islands. In Milan, besides a firm, he
12
Alleged cocaine drug traffickers
13
Alleged cigarette smuggler and business partner of the Djukanovic family
also has a comfortable flat.

DEBTOR: His son Bojan is Executive Director of Vektra Aviation. He graduated at a

college in Switzerland. According to a statement to the Serbian media, the young
Brković does not endulge in exclusive lifestyle, although he has "gotten used to meeting
Monica Bellucci 14 in Saint Moritz, Silvester Stalone 15 in Rome, while with Valentino
Rossi 16 he does not talk only about motorcycle racing, but also about business" .

Brkovic has been silent for some time. While he conquered the cities, one by one,he
liked to talk about success. ‘With the independence, Montenegro has become an
interesting destination for large American investors and I already have a hint that these
powerful American companies consider Vektra to be a relevant partner" boasted
Brkovic.

There are no Americans around, but there is a consolation prize. The Aluminium
Combine, which, alike Vektra, is in debt up to choke. "The DPS leadership will propose
to the Government to handover the management over the Aluminium Combine to
Dragan Brkovic" published the Podgorica’s daily Dan. “The bringing back of Dragan
Brkovic into the game is quite natural, since he has achieved exceptional results when
he managed part of the aluminium complex", conveyed the Portal Analytica in
February.

It would be a good solution: everything that Brkovic touches, as we see, turns into gold.
Using the model of the First Bank: the bosses get indebted up to the sky and then save
themselves - with our money.

Milena PEROVIĆ-KORAĆ
Milka Tadic-MIJOVIĆ

14
Well known actress
15
Well known actor
16
Motorcycle racing champion