Vlade Divac, the famous ex-basketball player turned businessman, scored a big win with a Serbian Supreme Court ruling that could allow him to purchase the country's highest-circulation newspaper -- the Belgrade daily Vecernje Novosti.
By Georgi Mitev-Shantek for Southeast European Times in Belgrade - 06/07/06
The Serbian court decision clears the way for Vlade Divac to purchase the Belgrade daily Vecernje Novosti. [UN]
Ex-NBA star Vlade Divac, who played with the Chicago Bulls, Sacramento Kings and the LA Lakers, has won his court case against the ministry for economic affairs. This ministry is in charge of the Serbian Business Registration Agency, which had refused to register a share capital increase by Divac's company in the Belgrade daily Vecernje Novosti.
By obstructing what normally should have been a technical issue, the agency appeared to be siding with those seeking to prevent privatisation of the daily, which is known for toeing the government's line.
According to the Supreme Court ruling, the agency had no legal grounds for halting the registration procedure, despite the current dispute over the state-owned portion of share capital. It is not clear whether the state share belongs to Serbia or the former joint state of Serbia-Montenegro.
The portion Divac's company was barred from holding was allowed to a group of small shareholders headed by Vecernje Novosti editor-in-chief and general manager Manojlo Vukotic.
The basketball star cried foul, saying the move was due to political pressure from within Serbian Prime Minister Vojislav Kostunica's party, which apparently is reluctant to lose the influence it enjoys via the country's highest-circulation paper.
The well-liked Divac initially offered shareholders 2,500 euros per share, promising that he would not influence editorial policy nor fire anyone. He said, however, that this is not his final offer.
According to an independent auditing company, Vecernje Novosti is valued at 30m euros. Others interested in the paper include Westdeutsche Allgemeine Zeitung, as well as some Serbian tycoons. The Germans are offering 3,500 euros per share, but with no mention of a social programme, while Serbian tycoons have not publicly stated their bid.
The manoeuvre with a share capital increase instead of a direct purchase of shares or a takeover is borderline legal. But it is common in Serbia, since the government and the management of enterprises use various legal loopholes to prevent small shareholders from selling their shares on the stock exchange.
It was not Divac's first conflict with the Serbian government. Previously, he attempted to buy the producer of the most widely sold mineral water in Serbia, Knjaz Milos. But others blocked him, including the Securities Commission, lobbyists and foreign embassies. The company finally was purchased by a fund based in the Cayman Islands.
It is not possible to appeal a Supreme Court ruling. The government either has to act quickly and designate a buyer, or it will have to accept the fact that Divac, over whom it lacks influence, will finally buy something in Serbia.