Bosnalijek’s management ignored the questions of the largest shareholder representative
On June 20, the annual meeting of Bosnalijek shareholders was held. The representative of Haden Mr.Branko Marić attempted to exercise his right to receive reliable information, asking a number of questions concerning the quality of company’s management.
The questions that, in Haden’s opinion, require an honest and complete answer, mainly concern two main issues. The first one is the practice that has spread in recent years to assign Bosnalijek’s receivables to foreign companies, which has signs of withdrawal of funds through shell companies. The suspicious transactions of Bosnalijek’s management have already attracted the attention of investigative journalists and State Investigation and Protection Agency (SIPA).
The second important issue is the misrepresentation of Bosnalijek financial statements, when the company’s CEO and CFO, instead of writing off bad debts, only corrected their value and transferred a big part of them to the next year, thereby masking Bosnalijek‘s losses and creating the appearance of a successful and effective management work.
On June 20, Mr. Nedim Uzunović, company’s CEO, and Mr. Adnan Hadžić, company’s CFO, could not or did not want to give a clear answer to the questions addressed to them. In this regard, Haden is forced to repeat them publicly.
1. In 2017 Bosnalijek’s largest Russian distributors PROTEK and PULS received a notification from the Moscow office of Bosnalijek. The recipients of this document were required to transfer due funds to the accounts of CLOSE VILLE, a Czech company which had not conducted any economic activity before. According to Mr. Adnan Hadžić the assignment of the debt was the part of Bosnalijek’s plan to minimize its currency risks: the receivables from PROTEK and PULS were denominated in rubles while CLOSE VILLE took on obligations in euros. But since August 31, 2017 CLOSE VILLE is in the process of liquidation.
In this connection, Haden asks: what guarantees were provided by CLOSE VILLE?
2. In Note 18, Bosnalijek’s financial statements for 2017 show the accounts receivable of PHOENIX PHARMA from Serbia in the amount of 8.9 million KM. The same amount from this debtor was shown in the financial statements for 2016. At the same time, sales in Serbia in 2017 amounted to 2.8 million KM.
In this connection, Haden asks: does this mean that the receivable of 8.9 million KM is hopeless? If so, why is this amount not being written off?
3. On October 12, 2015, Bosnalijek and MAKSIMUS HOLDING, a Slovenian company, signed a factoring agreement, according to which the latter was assigned the receivables worth about 10 mln euros from the Russian company GRAMA. A month later, after GRAMA transferred about 5.55 million euros directly to the Bosnalijek accounts, the additional agreement between Bosnalijek and MAKSIMUS HOLDING was signed which reduced the amount of claim rights to 4.5 million euros. The factoring fee according to the Annex to the Agreement amounted to 2,23 million euros, i.e. more than 52% (!!!) of the value of the receivables.
In this connection, Haden asks: what were the reasons for the assignment of the debt and the approval of such unprecedented amount of factoring fee? Especially taking into account the fact that shortly before Bosnalijek and MAKSIMUS HOLDING signed the additional agreement GRAMA had demonstrated its solvency.
4. According to the available information, MAKSIMUS HOLDING used Bosnalijek’s money (factoring fee), making payments in favor of Mr. Salomon Augupfel. Mr. Augapfel is the owner and the director of FELICERTES COMMERCE AG, which received shares of Bosnalijek after the additional issue in 2017. This circumstance is currently being investigated by SIPA.
In this connection, Haden asks: how can the Bosnalijek’s managment comment on it?
5. On December 30, 2016 the management of Bosnalijek assigned the debt of the Russian company IMPERIA SODRUZHESTVO (16,5 million euros in total) to MAKSIMUS HOLDING. In its turn, on May 16, 2017, MAKSIMUS HOLDING further assigned this debt to Russia-based company INTERNATIONAL AGENCY NEXT-CONCERT. Due to the determination of The Arbitration court of the North-Western district (St.-Petersburg, Russia) Bosnalijek lost the chance to return this money.
In this connection, Haden asks: why did Bosnalijek’s management sign a factoring agreement without guarantees from MAKSIMUS HOLDING? Was it due to negligence or malice?
6. According to the Bosnalijek financial statements, the debt of MAKSIMUS HOLDING in 2017 was corrected only partially and its big part was transferred to the next year.
In this connection, Haden asks: why is the debt of MAKSIMUS HOLDING not attributed to bad debts? Is this done in order not to spoil the financial statements in 2017?
Haden will continue to use all legitimate opportunities to seek from Bosnalijek’s management honest answers to the listed issues.