HOW ŠOLAK BECAME THE RICHEST SERB: Tax games without borders – a business network made up of over 100 companies (16)

Although Šolak's financial and other sorts of power come primarily from the revenues of the cable operator SBB Telemach, his business empire consists of over 100 companies, and their number keeps changing as new ones are founded and used ones are shut down. The companies within this network regularly engage in mutual financial trading, as a result of which United Group's owner optimizes paying his taxes and, via his affiliates, partially conceals his ownership in some of the companies.

The efforts to transfer money made in Serbia into tax havens and so evade paying taxes in Serbia are far better illustrated by these companies' structure and organization than the sheer number of companies passing through Šolak's system.

The Malta Files reveal Šolak's offshore scheme

In order to minimize paying the income tax, the controversial Serbian billionaire bought at one point a Maltese passport for EUR 650,000 via the so-called Individual Investor Programme (IIP). According to the information discovered by the web portal Malta Today, Šolak's name appears in the Malta Files project documents, where he is mentioned as one of the millionaires who dodge paying taxes.

Although the Maltese authorities refused to reveal the names of those who were granted citizenship by naturalization via the above programme, the Malta Today reporters managed to identify Šolak's name and the name of his wife Gordana; the names of two more dependents, N. and S. Šolak, were also identified, with addresses at two different locations – one in Sliema and the other in the luxury residential area Tigne Point.

The Malta Files project, run by the European Investigative Collaborations (EIC) with the participation of the portal Malta Today, exposed the extent to which they had used the Maltese tax system to transfer their profits into the country and pay less tax than they would have in Serbia.

Malta Today discovered that the tax evasion took place when a number of TV stations from the Balkans had paid Šolak's media group EUR 6.7 million for the rights to broadcast sports content, but this money ended up in Malta, Cyprus, and Liechtenstein. According to this information, the company United Media Malta was founded in 2014. Even though this company had no employees, between August 2014 and August 2015 it received EUR 6.7 million from the Croatian Telekom, Iskon, and VIPnet, and paid as little as EUR 27,000 in taxes in Malta. Once the transaction was completed, the company way liquidated in late 2015.

The web portal also discovered that until 2015 Dragan Šolak had owned the Maltese company Prestige Media, which made a total of EUR 10 million in profits before liquidation. Owing to the Maltese tax system, this company only paid EUR 400,000 in taxes on this amount. The portal also pointed out that Šolak's media group is one of the biggest telecommunications groups in the Balkans, providing internet services, telephony, and TV programming to domestic and foreign clients, with a revenue of app. EUR 440 million in 2016.

All Šolak's footprints lead to offshore zones – The Isle of Man, The Cayman Islands, and The Virgin Islands

According to its official financial statement for the first half of 2020, United Group had completed over 100 acquisitions in the past 20 years and made as much as EUR 793 million in profits in 2020. According to the same document, the co-ownership structure includes the different percentage shares of the funds BC Partners, Kohlberg Kravis Roberts & Co (KKR), the EBRD, and the management, in which Šolak is in the lead. His share in Summer Parent (Luxembourg), United Group's controlling company, once at 34 percent, reached 41 percent in early 2021.

Šolak controls this and many other companies via firms founded in offshore zones that he hides behind. They include Gerrard Enterprises (The Isle of Man), Gerrard MIP (The Cayman Islands), and Gerrard Consultancy Service Limited (The British Virgin Islands).

In addition to the controversial Serbian billionaire, the ownership structure of the companies also features his wife Gordana, who owns a 4.99-percent stake in United Media through BVI Cable Management Company Ltd. United Group itself consists of Serbia's SBB, Telemach (Slovenia, Bosnia & Herzegovina, and Montenegro), Total TV (active in six countries of the former Yugoslavia), and Vivacom Bulgaria, Nova Greece, and NetTV Plus. The company connects a 1.8 million-strong client base in the territory of the former Yugoslavia alone.

United Group also includes United Media, which consists of numerous news, sports, film, children's, and other television channels in the region – Sport Klub, Cinemania, Ultra, Mini Ultra, Lov i Ribolov (Hunting and Fishing), N1, Nova S, and Grand, as well as CAS Media – an agency selling advertising space on cable and satellite channels in the region.

COMING UP NEXT: How the first Serbian euro-billionaire's business empire is organized