Destructive Management

A number of managerial decisions by Bosnalijek’s executives run counter to the interests of the company and its shareholders, and are likely motivated by personal interest of the management.

The management of Bosnalijek has actively used schemes with assigning its receivables to foreign companies without Supervisory Board’s consent since at least 2015.

For instance, on October 13, 2015, Bosnalijek and Maksimus Holding, a Slovenian company, signed a factoring agreement, according to which the latter was assigned the receivables worth 9,998,713 euro from the Russian company GRAMA. The factoring fee amounted to 2,233,543 euro, i.e. more than 22% of the value of the receivables.

On December 30, 2016 Bosnalijek assigned the debt worth 16,5 mln euro of Imperia Sodruzhestvo to Maksimus Holding.

No economic reasons for assigning the receivables have ever existed. There are serious grounds to believe that these operations were really needed to siphon off funds to firms controlled by Bosnalijek’s executives.

In March 2017, Bosnalijek’s largest Russian distributors received a notification from the Moscow office of the manufacturer, which informed them on the assignment of Bosnalijek’s receivables to Close Ville sro, a Czech company. According to the notification, the recipients were required to transfer due funds to the accounts of Close Ville.

The economic motivation of this assignment is unclear. Close Ville gives the impression of a dummy company bought from former owners shortly before the assignment solely for questionable financial transactions with Bosnalijek’s funds:

  • Close Ville was registered in the Czech Republic in 2007 as a real estate company.
  • In February 2017, Casalo Enterprises Ltd, a company set up in Cyprus that same year, became the beneficial owner of Close Ville.