The Inefficiency of Slovenian Regulatory Authorities in the Case of Pink Si

The Inefficiency of Slovenian Regulatory Authorities in the Case of Pink Si

Not the first, and won’t be the last, instance of non-transparent media takeover in Slovenia. 

(Translation to English: Dušan Rebolj)

The Pink Si television channel began broadcasting in Slovenia at the end of September 2011, under the umbrella of the Serbian-based Pink Media Group. The group, owned by Željko Mitrović, is one of the leading privately owned media companies in Southeastern Europe. Pink Si received a special welcome by the Post and Electronic Communications Agency of the Republic of Slovenia (now renamed the Agency for Communication Networks and Services of the Republic of Slovenia) in the form of a national broadcasting licence. A gala reception marked the launch of broadcasting, held at the Ljubljana Town Hall and attended by Serbian and Slovenian celebrities and public officials. Among others, Božidar Đelić and Predrag Filipov, then the vice president of the Serbian government and Serbian ambassador to Slovenia, respectively, as well as Ljubljana mayor Zoran Janković graced the event with their presence. The launch party continued with a concert in the Ljubljana city centre and a fireworks display.

The hues of Pink Si, a phantom television channel
It only took three months for Pink Si to stop paying its employees and contractors regularly. By January 2011, the project of Pink’s Slovenian branch had begun going under. The entire news team was fired overnight without airing a single broadcast. Employees and contractors gradually stopped being paid for their services (,,, and Pink Si’s debts slowly accumulated, eventually surpassing two million euros. Nataša Prodan Miani, the director of Pink Si at the time, and Željko Mitrović promised creditors to solve the problem through recapitalization. In the autumn of 2011, the directorial position at Pink Si was filled by Sebastjan Vežnaver, the owner of PVG Ltd., a scooter selling company from Slovenia. Unfortunately, he didn’t benefit Pink Si by bringing in any extra capital. Instead, he began systematically buying up Pink Si’s debt and making “loans” to the company. It was on the basis of these “loans” that Vežnaver’s company PVG acquired the largest ownership share in Pink Si and the deciding role in voting to carry out the already planned “reorganization” or, rather, compulsory composition. By carrying it out, the Pink Si owners made more than a million and a half euros at the expense of their creditors
Preparation to “reorganize” Pink Si was made at several levels. In February 2012, Vežnaver sold the right to broadcast Pink Si to Bojan Umer and his company Agencija Medias Ltd. for 10,000 EUR. Umer and Vežnaver had a history of partnerships in notorious company takeovers. Before his purchase of Pink Si’s broadcasting rights, Umer had had no experience in broadcasting whatsoever. After the rights had been sold, all broadcasting revenue was redirected to Agencija Medias’ account, while the Pink Si account remained burdened by garnishing orders.
Even though Agencija Medias Ltd. was collecting the broadcasting business proceeds, it did not formally hold a broadcasting licence. While it did own the broadcasting rights, having contractually acquired them for 10,000 EUR from Pink Si, the licensing proceedings at the Agency for Communication Networks and Services (ACNS) were taking an extraordinarily long time. Hence, two legal entities were attached to a single television channel: Agencija Medias owned the broadcasting rights, while Pink Si held the broadcasting licence.
The marathon-length proceedings, which lasted nearly ten months, concluded by the ACNS denying the permission to transfer the broadcasting licence from Pink Si to Agencija Medias. Norkring Ltd., a Norwegian company that formerly operated the commercial multiplex B in Slovenia and was one of Pink Si’s largest creditors, sued for Pink Si to have its broadcasting licence seized on the grounds of its outstanding debts. A local court ordered the seizure, tying the hands of the ACNS: since Pink Si had its broadcasting licence seized for failing to pay its debts, it could not transfer it to another legal entity.
Pink Si kept broadcasting throughout the proceedings at the ACNS, even though according to the Mass Media Act, it’s illegal to perform radio or television activities without the appropriate licence. The inconsistent legal framework meant that the television channel could effectively break the law. A group of media content translators, to whom Pink Si owed fees, alerted Agencija Medias that since it didn’t contractually acquire the economic rights to the translations used by its television channel, it was, as the new broadcaster, in breach of the Copyright and the Related Rights Act. Agencija Medias responded that legally it didn’t own the television channel, since Pink Si still held the licence. But, one might object, if Pink Si indeed owned the channel, why was Agencija Medias receiving its broadcasting revenue? Apparently, the legal vacuum enabled differing interpretations according to different interests, but all of them at the creditors’ expense. Soon after, the channel simply stopped showing the films’ end credits, which meant the translator credits were cut as well. 
Despite the negative ruling of the ACNS, the broadcasting has continued to date, albeit under different names. In March 2012, Pink Si became TV3 Pink, then renamed itself TV3 Medias in September of the same year. The name changes and the broadcasting rights transfers seemed suspicious both to the public and to the Broadcasting Council. Although it seemed the company owners were taking evasive maneuvers in order to manipulate the creditors and avoid paying the TV-channel’s debts, the Ministry of Culture approved every single name change.
The Mass Media Act allows the holder of the broadcasting licence to transfer it to another legal entity. The only requirement is for the holder to agree to transfer the licence. The ACNS approves the transfer by issuing a new decision, and the ministry enters the new medium into the register of media without checking the company’s financial condition, its experience in the media industry, or the consequences the change of broadcaster might have. In certain complex cases, the ACNS may carry out monitoring activities before approving a name change. In the case of Pink Si, the Broadcasting Council encouraged the ACNS to do so, yet it remains unclear whether the ACNS has ever conducted any monitoring. Also, if there is reason to believe that the provisions of the Mass Media Act have been violated, it is standard practice for the ACNS to inform the Culture and Media Inspectorate of the Republic of Slovenia. No such action has been taken in the case of Pink Si. Again, the reasons are not entirely clear.
There were other complications. Upon changing its name from Pink Si to TV3 Medias, the channel “borrowed” the logo of TV3, formerly a Slovenian television channel owned by the Swedish company MTG. Despite the fact that the brands are “identical or similar” and both refer to services of the same kind, which would suffice by law to launch an inspection procedure, the Market Inspectorate failed to do so. Due to trial complications, Prva TV, a company then in the process of liquidation which owned the logo, dropped the lawsuit. Additionally, the Norwegian Norkring left the Slovenian market with Pink Si owing it around 400,000 euros. All its attempts to recuperate the debt in courts were in vain. 
Foreign companies were not the only ones affected by the inefficiency of Slovenian authorities. Other creditors of Pink Si suffered as well. Once the company owners stopped paying for services, the creditors started going to court and demanding garnishing orders be placed on the company’s account that would direct all revenue to creditors as long as it would take for debts to be paid. However, while a creditor is required to present a credible document to prove an amount is owed, the debtor may object with no proof at all. In this way, the debtor’s nonsensical and immaterial objections, combined with the slowness of courts and their resulting delays, may cause a garnishment proceeding to take six months or even more and result in non-payment of debt. Shortly after Vežnaver had taken the reins at Pink Si, the financial transactions were redirected to Agencija Medias’ bank account. The official address of Pink Si was also changed, probably to avoid the seizure of movable assets, since at the new address neither the company nor its sign or mailbox were located.
So for a good length of time Pink Si was a phantom television channel in Slovenia. It didn’t really have headquarters; it didn’t really have a bank account; and it didn’t really have anyone to broadcast it.
A million and a half euros’ worth of “reorganization”
In April 2012, compulsory composition proceedings began for Pink Si at the Ljubljana District Court. They were concluded in October of the same year (source: Agency of the Republic of Slovenia for Public Legal Records and Related Services, Decision of approval of compulsory settlement [hereafter, the APLR], 29 Oct 2012). The fiduciary, rather than exposing the shady dealings of the parties involved with Pink Si, suggested compulsory composition, which the court approved. A look at Pink Si’s major creditors who voted for compulsory composition reveals that, with a handful of exceptions, they were either companies directly owned by, or associated with, Sebastjan Vežnaver, Bojan Umer or Željko Mitrović. Through compulsory composition, their owners gained nearly a million and a half euros at the creditors’ expense. Pink Si owed 2,220,796.02 euros in total. According to settlement terms, it is obliged to pay the creditors 750,615.82 euros in the next four years (Source: APLR). To date, it hasn’t paid them a single cent.
In spite of its continuing failure to pay its debts, Pink Si, a company in the process of compulsory composition, bought back the Pink Si/TV3 Medias television channel. The transfer of broadcasting rights from Agencija Medias back to Pink Si was conducted in March 2013. Based on this contract, the company Pink Si resumed the role of TV3 Medias’ official broadcaster at the end of 2013.
The broadcasting rights to Pink Si were transferred several times. First, the company Pink Si, headed by Sebastjan Vežaver, sold the rights to Agencija Medias, owned by Bojan Umer. Next, Agencija Medias sold the television channel to the Serbian-based company Beohemija whose owner was Željko Žunić. And finally, Pink Si, owned by Željko Mitrović, bought back the television channel. Most of these players appeared in past takeovers that bore a jarring similarity to the story at hand. Together with the Serbian Beohemija and its owner Željko Žunić, Vežnaver bought the company Pejo Šampionka, and then proposed bankruptcy proceedings due to insolvency (source: the Slovenian Press Agency [hereafter, the SPA], “Pejo Šampionka v stečaju [Pejo Šampionka Goes Bankrupt]”, 18 Aug 2009). Another company that ended up bankrupt was Ekspresna dostava, owned for many years by, among others, Vežnaver and Beohemija and later bought by Umer’s Agencija Medias. Mere months after the purchase, Ekspresna dostava entered compulsory composition proceedings, after having all its profitable activities transferred to the company Doortodoor, based in Ljubljana
According to APLR data, Željko Mitrović is the majority owner of Pink Si. Once more, Pink Si holds both the broadcasting rights and the broadcasting licence for the TV Medias (formely, TV Pink Si) television channel. There is ample reason to believe that Pink Si has been TV Medias’ actual broadcaster all along. Sebastjan Vežnaver, the director and co-owner of Pink Si, and Boštjan Umer, the owner and director of Agencija Medias, persisted in claiming that the Serbian-based and Željko Mitrović-owned Pink had nothing more to do with the “new” TV3 Medias television channel. However, this was clearly not the case. The channel continuously aired programmes produced by the Serbian company, and new TV3 Medias programmes (such as the popular entertainment programme “Zadetek v petek [Friday Fun]”, hosted by Klemen Slakonja) were taped at Pink-owned studios in Belgrade. A claim made by Tatjana Javornik, the head inspector at the Culture and Media Directorate, gives weight to the suspicion: “Pink Si Ltd. held the broadcasting licence the entire time, while Agencija Medias, for a short period only, held the broadcasting rights, which were being contractually transferred from Pink Si Ltd. to Agencija Medias, and then from Agencija Medias back to the initial holder, Pink Si Ltd.” (Source: e-mail dated 19 March 2014.)
Epilogue: no monitoring
Despite the suspicion that multiple violations of the law occurred in the case of Pink Si (the fake compulsory composition, the damages suffered by creditors, a company conducting business with no official address, copyright infringement, broadcasting without a licence, etc.), not a single Slovenian regulatory authority carried out any monitoring of either Pink Si or Agencija Medias.
Additionally, two questionable practices have lead to complications with Pink Si, and consequently harmed the creditors: the name changes, made easy by the provisions of the Mass Media Act regarding the name of the medium, and the attempts to sell the broadcasting licence. The Broadcasting Council explicitly outlined the problem with the transferral. It was obviously attempted “because of bad financial results,” and could “potentially incur damage to the creditors, which the Council shouldn’t silently observe.” Furthermore, the Council found it unacceptable that an owner should “transfer the licence to another company simply to avoid any inconvenience.” (Source: 2nd session minutes, 17 Jul 2012, page 7.) It was also deemed problematic that the licence should go to someone “who is not even in the business of television production, yet is expected to keep providing programming in its present form.” (Source, 2nd session minutes, 17 Jul 2012, page 8.) The minutes also mention the Info TV channel. Its story is highly reminiscent of Pink Si: “It’s absurd for the Council to issue the company Info TV a positive provisional opinion on the transferral of the broadcasting licence while we keep hearing in the media that the company is insolvent.” (Source: 2nd session minutes.) 
It’s obvious that the “reorganization” of Pink Si is not the first of its kind in Slovenia. If the conditions within legislation and within regulatory authorities remain as they are, we can expect this to become an established business model. When you incur debt and get into trouble, force compulsory composition on the broadcaster and transfer the broadcasting rights to another company, gaining a new television channel with programming but no debts; then change the name of the channel and get it back by repurchasing the broadcasting rights, thus getting out of debt altogether.
To the Culture and Media Inspectorate of the Republic of Slovenia, this is not a problem. The inspectorate considers the resale of broadcasting rights a “mitigating circumstance,” and partly bases on it the decision not to engage in any inspection activities. Additionally, the head inspector states, the broadcaster “attempted to acquire the broadcasting licence and formalize its status in the media register in accordance with the law, so the potential irregularity did not merit inspection.” (Source: e-mail, 19 March 2012.)
The response of the head inspector at the Culture and Media Inspectorate points to the paradoxical nature of the situation. We seem to be dealing with two parallel worlds: the real world, inhabited by citizens who expect the regulatory authorities to protect our rights, and another world, where regulatory authorities operate. The schizophrenic gap between the actual state of affairs and the institutions charged with upholding the law is too wide to ignore. The renaming of television channels and reselling of broadcasting rights, or put differently, the transferrals of media activities from one company to the next in order to get out of debt has long-term consequences for the entire society in Slovenia. Media employees are especially vulnerable to this, since non-punishment of such action leads directly to their constant exploitation.  
The Pink Si/TV3 Medias case is not the first, and won’t be the last, instance of non-transparent media takeover in Slovenia. The road to practices of this sort has been opened and paved, and is fairly reliable. It also quite apparent that Slovenian regulatory authorities are incapable of offering a suitable solution to the maneuvering and manipulation of media ownership, as well as media legislation, and can neither prevent such actions nor punish the perpetrators. 


Media Integrity
Media Ownership and Finances