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Police arrest Serbia's richest man in anti-graft probe

Source: Thomson Reuters Foundation - Wed, 12 Dec 2012 17:35 GMT
Author: Reuters
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* Retail tycoon held in inquiry into privatised road companies

* Miskovic seen as one of Serbia's most influential figures

* Made money under Milosevic, flourished under democrats (Adds analyst, edits)

By Aleksandar Vasovic

BELGRADE, Dec 12 (Reuters) - Miroslav Miskovic, a billionaire tycoon who built a retail empire during Yugoslavia's bloody collapse and went on to become one of Serbia's most powerful people, was arrested on Wednesday as part of a corruption investigation.

The swoop climaxed months of accusations against Miskovic by Defence Minister Aleksandar Vucic, the government's anti-graft czar who took power six months ago promising to get to grips with deep-rooted organised crime and corruption.

Success on that front is crucial for Serbia's candidacy for membership of the European Union, with Belgrade pushing for accession talks to start in 2013.

Miskovic, a slight, bespectacled 67-year-old who is estimated to be Serbia's richest man, was arrested at his home in the snowbound capital, Belgrade. Eight others were also taken into custody, including Miskovic's son, Marko.

"The message to everyone in Serbia is that there are no more untouchables," said political analyst Zoran Stojiljkovic. "Regimes and governments changed, but he (Miskovic) stayed. This is now a clear message that nothing is off the table."

The chief organised crime prosecutor said those arrested were suspected of illegally milking millions of euros from a group of privatised and now bankrupt road maintenance companies.

"According to charges ... as co-owners of privatised road maintenance companies between 2005 and the end of 2010, they siphoned off funds and property and made financial gains of as much as 2.9 billion dinars (${esc.dollar}33.4 million)," prosecutor Miljko Radisavljevic told Reuters.

Miskovic's Delta Holding company issued a statement denying any irregularities. "We are absolutely sure of the legality of operations by Delta Holding and its owner (Miroslav) Miskovic," the company said on its website. It said the board of directors would continue to manage the company.

CHANGE OF POWER

His arrest was a bold move by the governing coalition, an alliance of nationalists and socialists who last shared power at the tail end of Slobodan Milosevic's 13-year rule, when Vucic was the feared minister of information and Serbia was at war with NATO.

The Belgrade government says it is serious about tackling crime, though some Western diplomats fear it is motivated more by political score-settling than genuine reform.

Police said they had stepped up security for Vucic, saying Miskovic had threatened him during the arrest. Miskovic's lawyer denied his client had threatened anyone.

Under Milosevic, Serbia became a pariah for its role in the wars that tore apart Yugoslavia in the 1990s. As ordinary Serbs became mired in poverty, a brash elite made fortunes busting sanctions and profiting from cosy ties to the president.

Miskovic served briefly as deputy prime minister under Milosevic in 1990, but quickly switched to private business. When Milosevic was ousted in 2000, Miskovic survived and then flourished under the pro-Western Democrats who took power.

With over 7,000 employees, Delta Holding has interests in retail, agribusiness, real estate and insurance in Serbia and the Balkans region. It is the exclusive distributor of Nike and a franchise partner of Costa Coffee.

In 2007, Miskovic was worth a billion dollars, according to the finance magazine Forbes. In 2011, he sold his Delta Maxi supermarket chain to Delhaize, a Belgium-based retailer, for 932.5 million euro (${esc.dollar}1.21 billion).

Last year, Delta Holding says it turned over 1.42 billion euros (${esc.dollar}1.85 billion).

The pro-Western Democratic Party was voted out in May this year, punished for a bruising economic downturn and accusations of cronyism - and replaced by a socialist-nationalist alliance.

Since then, police have arrested more than a dozen businessmen, including two ex-cabinet ministers from the former ruling Democratic Party, on charges of corruption, fraud and abuse of office.

(${esc.dollar}1 = 0.7693 euros) (Editing by Matt Robinson and Mark Heinrich)

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