HOW ŠOLAK BECAME THE RICHEST SERB: The return to Serbia and the start of the strategic partnership with George Soros (2)

When his Slovenia business went under, Šolak returned to Serbia in 1998 and started the company Kablovski Distributivni Sistem (Cable Distribution System; KDS) – SBB's predecessor – with his brother-in-law Dušan Radosavljević

Under the regulations at the time, privately-owned companies could not register independently for the activity of distributing television content, so Šolak and Radosavljević were provided with 25 percent of the capital by the Kragujevac City Hall, through Radio Television Kragujevac (RTK), a local television station.

According to the people with knowledge of the political situation in Kragujevac at the time, Šolak was close to the leadership of the local Democratic Party committee – primarily Vlatko Rajković and Predrag Petaković, who was the director of RTK.

It was then that KDS started to introduce cable television within the Kragujevac City bounds. Soon after, it got hired in public tenders for jobs in parts of Belgrade, Mladenovac, and a few more cities across Serbia. As the company did not have enough capital to cover all these areas, in mid-2001 it applied to the Southeast Europe Equity Fund (SEEF), established by the US-based Overseas Private Fund Investment Corporation (OPIC) and Soros Private Funds Management, which had earmarked $200 million for investment in undeveloped regions, primarily in the areas of telecommunications, cable television, and paper production.

Šolak's personal acquaintance with George Soros was a major contributing factor in his company's success in the application process. According to the people who knew Šolak, he met Soros soon after the events of 5 October, 2000. At the invitation of OPIC representatives, Šolak paid a number of visits to the corporation office in Bulgaria, where he forged business ties with Ilian Gligorov, Philipe Rombant, and later also with Ronald Drake, who was Director of Strategic Investments.

In early 2002, Petaković concluded on behalf of RTK an annex to the agreement on the business collaboration with KDS. Although the main agreement stipulated that the local television station had the right to 25 percent of the distributor's profits, with the remaining three quarters going to KDS, under the newly concluded annex KDS had become the owner of the entire capital. As it happened, Petaković subsequently took up the post of deputy director of cable distribution for SBB programming. In February 2002, a capital increase of KDS was carried out by SEEF by signing an agreement on the establishment of the first US-Serbian company in Kragujevac, with foreign capital holding the majority stake.

The agreement was signed by Šolak as the KDS CEO, Petaković as the RTK director, and Philipe Rombant as the SEEF CEO. This fund initially invested $5 million in KDS development with the aim of establishing in Kragujevac the main cable distribution centre for the Federal Republic of Yugoslavia. Šolak was appointed as the director of the cable distribution system for the FRY, and Radosavljevic as the director of KDS for Šumadija and the Pomoravlje District.

From a business run from a Kragujevac garage to a $3.4 billion company

The fact that Šolak's cable business was quite modest until he partnered up with Soros was confirmed by United Group CEO Victoriya Boklag. In a panel discussion titled "An extraordinary story of growth in the European cable distribution and media industry", dedicated to Šolak's company and held in Jordan on 9 May 2018 under the auspices of the EBRD, Boklag said that she was proudest of the fact that she could say that they had "started their business in a garage or an apartment and had become the largest media and telecommunications company in Southeast Europe."

COMING UP NEXT: The partnership with Soros – a strategic watershed in Dragan Šolak's business career

Bonus video: