HOW ŠOLAK BECAME THE RICHEST SERB: How the first Serbian euro-billionaire's business empire is organized (17)

The arrangement of the companies linked to Dragan Šolak shows that his entire business system is organized as a complex structure comprising a great many firms in which Šolak features as a co-owner, alongside the funds BC Partners and KKR (until January 2012).

In this way, via the co-owned companies registered in tax havens (The Isle of Man, Luxembourg, The Cayman Islands, and The Virgin Islands), Šolak and the abovementioned funds set up a very complex structure of companies with the aim of optimizing paying taxes and hiding the money trail as much as possible. There are over one hundred companies in the entire system (with the number varying as a result of constantly founding new companies and shutting down the existing ones). They are registered in as many as 17 different countries, with the company Promedia (which is indirectly owned by United Media) registered in Kosovo.

Complex structure of companies aimed at funnelling money out

For the purposes of indirect ownership and control over United Group (UG), Šolak and his investment partners set up the company Summer Parent in Luxembourg. Before the investment fund KKR pulled out of the ownership, the company in question was owned by the following legal entities: KKR Adria Topco from the Cayman Islands; Summer Invest from Luxembourg (BC Partners); the EBRD; Gerrard Enterprises from the Isle of Man (Dragan Šolak); and Cable Management Company from the Virgin Islands, which is also believed to be owned by Šolak. Via a number of companies owned both directly and indirectly, Summer Parent has a 100-percent stake in United Group. The way from Summer Parent to United Group takes one via a chain of ownership in four companies, all of which – like United Group – are registered in the Netherlands.

Through its daughter company Adria Serbia HoldCo, UG has a 100-percent stake in the SBB cable network and the other cable providers in the region – Telemach and Total TV. Furthermore, through Slovenia Broadband from Luxembourg, UG also owns the companies Adria News (Luxembourg), Telemach (Slovenia), United Media Network (Switzerland), Adria Media (The Netherlands), Absolut Solutions (Serbia), Tele 2 (Croatia), and United Media (Luxembourg).

It is through United Media that Šolak and his partners own an array of media outlets, as well as Direct Media (a company formerly owned by Dragan Đilas), CAS Media (a company selling advertising space), and TV channels and production companies Grand and IDJ.

The key element in this entire structure is the control and constant change of ownership of the cable providers SBB and Telemach. The purpose behind this is to avoid paying income tax by funnelling the profits made by these firms into the bank accounts of companies located in tax havens by means of fictitious costs and through affiliates. A whole set of mechanisms has been devised with this in mind, including creating fictitious costs and payments made to affiliates, as well as paying interest on capital loans, which obligation has on three occasions been transferred to SBB during these fictitious sales.

Separate branch of Šolak's companies

On the other hand, as part of the structure which is itself a separate branch, Šolak owns two more firms on the Isle of Man through his company Gerrard Enterprise (Gerrard Investments and Gerrard Estate Holding). Through the same company, the controversial Serbian billionaire also owns two airlines in Austria, as well as golf courses and clubs in Slovenia and Serbia.

In addition, independently of the United Group ownership structure, through his Virgin Islands company Gerrard Consultancy Services Limited, Šolak co-owns with the EBRD the company Istra Cement. Through this company, he owns shopping malls and real estate on the largest Croatian peninsula: The Valbonaša Centar, The Banjole Camp, Maks City, Hotel Valkane, and Istra Val Maks Nekretnine.

Is Šolak hiding actual ownership in United Group?

A group of Serbian corporate law experts have pointed out that the information that Šolak has provided to the authorities in Luxemburg and in Serbia do not match. According to the Luxembourg Register of Beneficial Owners, Šolak is registered as the beneficial owner of Summer Parent with a 26.45-percent stake. This would imply that Šolak is also registered as the beneficial owner with a 26.45-percent stake in the Serbian companies indirectly wholly owned by Summer Parent. However, he is registered as the beneficial owner of the Serbian companies with a stake that varies between 33.66 and 34.33 percent, raising suspicions that he has been concealing the information regarding actual ownership either from the Serbian or the Luxembourg authorities.

Lawyers specializing in corporate law suggest that the network of companies that Šolak has set up across the globe was created to avoid paying income tax and sidestep the regulations outlawing ownership concentration. They have also pointed out that Šolak has used the companies with hidden ownership to avoid responsibility for the illegal use of certain content and having to pay for copyrights. The efficiency of this scheme in avoiding responsibility is best illustrated by the case of TV N1. Despite numerous fake news and smear campaigns, this TV channel has never been brought to court for the precise reason that it is very difficult to trace the company that is actually responsible for broadcasting its programming.

The Malta Files reveal ties to Dragan Đilas

In addition to the information regarding the purchase of Maltese citizenship, another bit of information links Šolak to the Malta Files scandal – the collaboration with WDM Trustees Ltd, a company involved in financial consulting and company registration in this offshore zone. The company is owned by Jonathan De Giovanni, Diane Magro Delia, and Dunstan Magro, an expert in prevention of money laundering and financing terrorism. WDM Trustees Ltd has a 100-percent stake in Integration Gaming Services Ltd, a company whose legal representatives are Jonathan De Giovanni, Dragan Šolak, and Jadranka Drinić, a close and highly trusted associate of Dragan Đilas. This information confirms what Dragan Šolak and the leader of the Freedom and Justice Party have been hiding and denying for years – that there are close business and political ties between them that go back a long way.

COMING UP NEXT: Close business ties with Dragan Đilas

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