Interests of the Greek Businessman Petros Stathis in the Montenegrin Media

In the spring of last year, the Greek businessman Petros Stathis bought two Montenegrin portals, Analitika and Cafe Del Montenegro (CDM), and thus became the owner of four Montenegrin media. In addition to these two portals, Stathis is the majority owner of two daily newspapers: the former state-owned Pobjeda, which he took over at the end of 2014, and Dnevne novine, which he has officially owned since 2013. However, many sources and data show that he is the founder of this newspaper, whose first issue was published in October 2011.

There is no clear economic logic behind Stathis’ expansion into the media market, as shown by the available financial and business documents. The two daily newspapers are expensive, unprofitable projects and require additional investments. Therefore, from the very beginning, it has been speculated that a different kind of trade is in question and that the Greek businessman has been financing and maintaining the media which supports the government of Prime Minister Milo Đukanović, in order to further the interests and privileges in tourism and other businesses that Stathis has in Montenegro. According to the records of the Commercial Registry, Stathis has founded 11 companies with different activities in Montenegro: from tourism and hotel enterprise to telecommunications and agriculture.

When the Greek businessman bought Pobjeda, this former state-owned newspaper was deeply in debt. Previous attempts to privatize Pobjeda had failed, and for more than a decade the government illegally financed the daily from the state budget. At the same time, Pobjeda was intensively used to deal with the government’s opponents. According to the Media Law from September 2002, Pobjeda ought to have been sold or shut down at that point.

Why, then, did the Greek businessmen take over a former state-owned newspaper? It certainly was not because of the profits from the newspaper sale. In the first two months of 2014, when Stathis bought Pobjeda, its losses, as shown in the financial report for that period, amounted to €413,665, and part of a pattern of loss-making. According to financial documents, Pobjeda has been annually losing an average of two million euros.

The last tender for the sale of Pobjeda failed in the spring of 2012. At that time, a friend of Prime Minister Đukanović, the recently arrested former B&H defense minister Fahrudin Radončić and the official owner of Sarajevo Dnevni avaz, withdrew from this business, explaining that Pobjeda was not a "market leader" and that it was an "expensive project". At the same time, the former state-owned daily had a valuable property, which in Pobjeda’s audit report was estimated at €4,887,432. Even that was not enough for Radončić.  

The government registered the building as its own property in February 2013, so it was not a part of the package when Petros Stathis bought Pobjeda from the state in December 2014. Why, then, did the Greek businessmen take over a former state-owned newspaper?

It certainly was not because of the profits from the newspaper sale. In the first two months of 2014, when Stathis bought Pobjeda, its losses, as shown in the financial report for that period, amounted to €413,665, and part of a pattern of loss-making. According to financial documents, Pobjeda has been annually losing an average of two million euros.

According to Commercial Court documents, on 1 December 2014, when Media Nea paid the entire amount agreed for Pobjeda’s purchase, €757,000 was paid to Media Nea’s account from Stathis’ First Financial Bank (Universal Bank). The money was paid from his company, First Financial Holdings, which trades fruit and vegetables and is a founder Media Nea. The amount is the same as the price agreed for purchase of Pobjeda. Commercial Court records show that a month earlier,  First Financial Holdings’ capital was not enough to purchase Pobjeda, amounting to only €184,000. It seems that Stathis had to invest additional money.

According to a 2013 financial report, Pobjeda’s losses for that year increased by more than two million euros on 2012. During Pobjeda’s board meeting, held on 21 June 2013, according to report No. 28/02, it was stated that Pobjeda had operated at a €2,472,805 loss in 2012. “This is 38.2 percent more than 2011," states the report. The loss, thereby, increased despite wage cuts and a rationalization that, as stated in the report, had been carried out that year.

Revenues from newspaper sales, according to the report, decreased by 23.38 percent on the previous year. “There is an evident monthly decline in the circulation of Pobjeda and on an annual basis, it reaches 17.53 percent," states the document.

That there was no economic justification for Pobjeda to continue with operation was also noted in an independent 2013 audit report. “The losses of the company on 31 December, 2012 amounts to €25,941,188 and its equity at that date amounted to €18,349,639. A negative amount of €7,591,549 represents the missing 'eaten' substance, which in our opinion brings into question the continuation of operations of this business entity," reports the independent Mont Audit company.

The government, however, continued to finance the newspaper with public money until December 2014, when it was passed on to Stathis. During the decade of Pobjeda’s illegal operations, the government had repeatedly bought out Pobjeda’s huge debts, turning them into share capital. Losses grew in spite of “new beginnings” and debt write-off, annual transfers from the state budget, as well as other funds that Pobjeda withdrew from public funds and companies in the name of advertising.

According to Commercial Court documents, Stathis acquired a printing house, three smaller properties in Bar, Nikšić and Žabljak in which local bureaus were located, several cars, and a selection of office supplies for the price of €757,000. Although valuable, a printing house could hardly be an economic justification to continue with publishing a newspaper which made constant losses.
Pobjeda, whose losses and debts were for a decade covered from the state budget, was sold without a tender and through direct negotiation. The whole process – from the introduction into insolvency to sale – was quick and minimally transparent.

Pobjeda was introduced into insolvency in summer 2014, on the proposal of the Tax Administration of Montenegro, which enforced the collection of Pobjeda’s €358,494.66 tax debt on 21 July 2014.

Dnevne novine were distributed free of charge for the first half of the year. According to various estimates, a million euros must have been invested during that period. However, the founding acts of the company show that at the time, the capital of Darmanović’s company Media Nea was worth only a single euro!

Three weeks later, on 6 August, the Commercial Court issued a decision on insolvency proceedings. Since the insolvency management had not submitted a reorganization plan on 13 October 2014, a decision on bankruptcy was issued. By the next day, according to Commercial Court documents, Pobjeda’s manager had received an offer from Stathis’ company Media Nea.
Pobjeda’s Creditors Committee accepted the offer six days later, on 20 October 2014. According to the Law on Bankruptcy, a precondition for direct negotiation sale is the approval of the Creditors Committee.

According to the Law, the reorganization is applied “if there are economically viable conditions for the continuation of the debtor's business." It was unclear why Media Nea had bought (and continued to operate) a company perceived even by the insolvency management as a firm "that has no objective conditions for the reorganization”. Pobjeda’s insolvency manager, Milan Marković, declared that there were no conditions for reorganization in a letter to a judge Blažo Jovanić, who led the proceedings, and members of the Creditor’s Committee.

According to the sale contract, Stathis took over everything, including obligations towards employees. He continued to publish the newspaper, whose circulation until then was continuously decreasing, while debts were growing.

It is interesting, however, that on his website petrostathis.com, the Greek businessman has stated that he owns several media in Montenegro and that he is "a founder of Dnevne novine". Officially, Stathis took over Dnevne novine almost two years after Pobjeda was founded, in July 2013.

In addition, Media Nea had an equity of €70,000 in October 2014 when it submitted its offer for Pobjeda, according to Commercial Court data. This is ten times less than the price offered by Stathis and for which he bought Pobjeda in the end: €757,000.

According to Commercial Court documents, on 1 December 2014, when Media Nea paid the entire amount agreed for Pobjeda’s purchase, €757,000 was paid to Media Nea’s account from Stathis’ First Financial Bank (Universal Bank). The money was paid from his company, First Financial Holdings, which trades fruit and vegetables and is a founder Media Nea. The amount is the same as the price agreed for purchase of Pobjeda. Commercial Court records show that a month earlier,  First Financial Holdings’ capital was not enough to purchase Pobjeda, amounting to only €184,000. It seems that Stathis had to invest additional money.

On 12 December 2014, ten days after it paid the price for the state-owned newspaper, Media Nea founded a company called Nova Pobjeda. Draško Đuranović, a former owner of the portal Analitika, which is now owned by Stathis, was appointed as its Executive Director.

Pobjeda continued with its pro-government editorial policy. It is interesting that the Serbian tabloid Informer is also currently printed along with Pobjeda, according to its impressum. Informer’s editorial has the same pro-government approach, as stated in Media Institute report in December 2015.

The other Stathis media project in Montenegro, Dnevne novine, was not cheap either.

Dnevne novine were launched on 10 October 2011. At that point, according to records of the Commercial Court, the company Media Nea, which officially launched the project, was 100% owned by Boris Darmanović, former owner of the portal CDM. Dnevne novine were distributed free of charge for the first half of the year. According to various estimates, a million euros must have been invested during that period.

However, the founding acts of the company show that at the time, the capital of Darmanović’s company Media Nea was worth only a single euro!

Darmanović’s Media Nea with its one euro in capital not only was able to launch a costly and uncertain project such as Dnevne novine, but a month later, in November 2011, applied for the purchase of Pobjeda, which was heavily in debt. It was also unclear as to why Darmanović was interested in a company whose operation had no future, or how he intended to purchase it, since he did not meet the tender requirements.

Only a day after Stathis officially took over Dnevne novine, Prime Minister Milo Đukanović issued a proposal (No: 01-1114/3) to give Stathis Montenegrin citizenship, which was given.

This 2011 tender, called by the government, requested a company which intended to take over Pobjeda, having assets worth 15 million euros, at least three years’ experience in performing the core business, and a minimum of eight million euros in revenue at the end of the previous business year.

Darmanović explained that he had expected assistance from Petros Stathis, who wanted to “expand the range of his business”, in meeting the tender requirements and purchasing Pobjeda. Apparently, Stathis was not interested at the time, so the tender, upon the withdrawal of Radončić, was cancelled.

Darmanović insisted that the issue only concerned a potential partnership between him and Stathis, and that Dnevne novine were his own project, without any hidden Greek capital, which had been suspected at the time.

Photo: Boris Darmanović

It is interesting, however, that on his website petrostathis.com, the Greek businessman has stated that he owns several media in Montenegro and that he is "a founder of Dnevne novine".
Officially, Stathis took over Dnevne novine almost two years after Pobjeda was founded, in July 2013.

According to Commercial Court data, on 19 July 2013, Stathis bought Media Nea, the publisher of Dnevne novine, through his firm First Financial Holdings. From the account of Media Nea at the First Financial Bank, €70,000 was paid by First Financial Holdings. Stathis became the majority owner of Media Nea with 99.9 percent of the capital, while Boris Darmanović was registered as the 0.01 percent owner of the company with the initial capital of one euro. Darmanović’s director powers, according to the Statute of the company from that period, were limited to operations up to €500.

According to the founding documents, Stathis launched First Financial Holdings, the company that purchased Media Nea together with the offshore company Stangat Limited based in Cyprus, whose owners were not known to the public. In 2009, Stathis took over the entire company. Transfer of shares on behalf of the Cyprus company was signed by Greek ship-owner Victor Restis, acting as the company founder. Restis led most of Stathis’ ongoing businesses in Montenegro at that time. He withdrew in 2013, when he was arrested in Greece, and Stathis continued his activities in Montenegro. Although it is believed that Restis no longer operates in Montenegro, according to the Commercial Register of the Tax Administration, Stangat Limited is still the owner of two local companies with Greek capital: Golden Estate and Vires.

At the time when the valuable Dnevne novine project was launched, a company called Adriatic Properties 2, which was run jointly by Stathis and Restis, paid more than half a million euros for the lease of the Sveti Stefan resort, a pearl of Montenegrin tourism. Although that was the reason for the termination of the lease contract, the government did not do it. The company's debt for unpaid lease in October 2012 amounted to 2.6 million euros. In the end, the government allowed the debt to be paid in installments. In December 2015, Budvanska rivijera (Budva Riviera), from which Sveti Stefan was leased, sent to Adriatic Properties an invoice of 1.4 million euros for the unpaid rent.

Other daily newspapers Vijesti and Dan, which are critically oriented towards the government, often remarked that Dnevne novine, with their dumping prices, have tried to destroy the competition, and that was the real reason for their establishment: to diminish Đukanović's critics.

Only a day after Stathis officially took over Dnevne novine, Prime Minister Milo Đukanović issued a proposal (No: 01-1114/3) to give Stathis Montenegrin citizenship, which was given.
According to the Commercial Court, the founder of Stathis’ Adriatic Properties is the offshore company Aidway Investment Limited, registered in the British Virgin Islands, whose owners are unknown. The Network for Affirmation of NGO Sector (MANS) recently revealed that the legal representative of the company was  Ana Đukanović, then followed by Ana Kolarević , sister of Prime Minister Đukanović.  

MANS filed criminal charges, in January 2012, against several current and former ministers and local officials on the suspicion that they had abused their office in favour of companies under the control of Victor Restis and Petros Stathis, and which were leasing Sveti Stefan and managing a brown coal mine in Berane.

In the first criminal charge, MANS accused the Sveti Stefan hotel lessee that they had repeatedly violated contractual obligations without any sanctions, that the hotel was reconstructed without a building permit, and that buildings in Miločer park were built illegally. MANS published a document in which the competent inspection demanded that the Adriatic Properties building be demolished. This was not done.

In the second criminal charge, MANS accused the government of enabling Stathis’ illicit concession for the exploitation of coal over a period of 20 years, as well as for failing to terminate a contract, even though the stipulated obligations had not been met.  Stathis said at the time that MANS’ charges against the Restis groups were based on politically motivated lies and manipulation.

One of the recent special conditions provided for Stathis by Đukanović’s government was the annex to the contract on the lease of the Kraljičina Plaža (Queen’s Beach) hotel, which had been adopted in parliament at the end of the previous year. The government had sought with the annex to approve the extension of Stathis’ lease period from 30 to 42 years, to reduce rent prices to 30 percent, to approve the construction of 66 apartments for sale, as well as to write off a €250,000 lease debt and future lease payments until the preparation of spatial planning documents.

The annex at first, in July 2015, did not receive the support of the parliamentary majority. In time, it was passed thanks to the votes of Positive Montenegro, a small opposition party, which has been accused for a long time of political corruption. The rest of the opposition and the coalition Social Democratic Party (SDP) argue that the annex enables the purchase and sale of land below the apartments, but that nobody wants to admit this.

Although Stathis’ media operation doesn’t seem at first to have any economic logic, his tourism industry does.

In February 2016, Daily Vijesti announced that Stathis has not paid rent for three years to HTP Miločer, which has caused problems for this company. It took out a loan of €750,000 from Stathis bank. If the loan is not repaid, the Kraljičina Plaža hotel, along with its courtyard, could become the property of the bank.

In the spring of 2015, Stathis, following the purchase of two dailies, bought two portals, Analitika and CDM. He took over Analitika from Draško Đuranović, Director of Pobjeda, and CDM from Boris Darmanović, Director of Dnevne novine. These transactions have not been documented in the Commercial Register of the Tax Administration, although the electronic records of the registry report that Stathis bought these portals. Therefore, it is not known how much money Stathis paid. The Tax Administration explained that the reason for the lack of documents was probably caused by the failure of the founder to take it over from the Commercial Court.  

Stathis purchased Analitika (the Portal Press company) through its First Financial Holdings, which has been the 100 percent owner of the company since spring 2015. According to the electronic records of the Central Registry of Commercial Entities, its director is Draško Đuranović’s wife, Tinka. Tinka Đuranović was the owner of a large distribution company, Bega press, which went bankrupt, incurring heavy debts.

In 2011, Igor Lukšić’s government approved €880,000 in aid to Bega press after it had gone bankrupt, from the state budget. The aid was intended to settle debts to media. The biggest Bega press creditor, Futura Monte, whose owner is Stanko Subotić, a friend of Đukanović, has not been paid, as shown in bankruptcy documents. Bega press owes Subotić €323,609.
Stathis took over CDM through Media Nea. Boris Darmanović is registered as a director, a former owner of the portal.

Both portals, Analitika and CDM, were recognized as being pro-government before Stathis’ purchase. Analitika has been for years the portal that receives the most money from public and state funds for advertising purposes. According to the Centre for Civic Education, this money is not allocated transparently or with clear criteria.

Before the publication of this article, the Greek businessman had not responded to requests, submitted a month earlier, to explain why he had invested in expensive media projects in Montenegro, buying media with the same profile, two daily newspapers, or two portals.

Translation: Andjelija Kovacevic

This article was produced with the financial assistance of the South East European Media Observatory Project, supported by the European Union. The content of this article is the sole responsibility of its author Milena Perović-Korać and can in no way reflect the views of the European Union.