Series: SOLD

Sold, episode one

After the privatisation of PKB, the United Arab Emirates company Al Dahra came to own 42,007 acres of agricultural land in Belgrade and Serbia. The size of the acreage is perhaps best illustrated by the fact that the wider Belgrade area is spread over around 86,000 acres. On top of all this, the law prohibits selling state-owned agricultural land because this type of land is national treasure.

However, according to Insajder’s research, the sale of this exact type of land in this instance was made possible through the decisions, agreements, and rulings passed by government officials from 2009 to this day.

PKB’s privatisation was supposed to revitalise the bust agricultural giant. Instead, the ownership transfer model was used to sell its property and assets.

Launched in 1945 and growing throughout the 1970s, the business started to crumble in the 1990s when the company was broken down into its key divisions. Up until that time, the agricultural giant of Former Yugoslavia and Europe’s biggest farm operated under the farm-to-table principle.

Imlek was processing milk. Frikom was selling frozen vegetables. In addition, PKB operated its own sugar factory and slaughterhouse that processed meat. The finished products were all sold to consumers through the company’s supermarket chain Pekabeta. In 2003, Delta’s owner Miroslav Mišković bought Pekabeta. The investment fund Salford, represented by Milan Beko, bought Imlek.

PKB was now dependent on companies it once owned.

In the meantime, the local businessmen who up to 2012 were privileged to buy anything of value in Serbia apparently gave way to Arab businessmen.


Over several episodes, this series will present facts and evidence showing that PKB meant both everything and nothing to nearly every administration. The slew of controversies, debt write-offs, agreements, different laws, and administrative disputes was brought to an end in 2018 when the company was sold.


Al Dahra is an agricultural giant originally from United Arab Emirates and one of the leading agribusinesses in the Middle East. According to the official website, the company operates more than 395,000 acres of land throughout the globe. It’s present in more than 20 countries, such as Egypt, Greece, Morocco, India, and Pakistan. The company operates in more than 40 different markets in the USA, Europe, Asia, and Africa.


Listen, you have an investor that has good standing in Australia, in Egypt, in the USA. Recently he invested in Romania. This is the only place where this investor is no good. What exactly would suit you?




After PKB’s privatisation ended, Al Dahra’s purchase of the company was above board. The model selected for the sale of its assets was indeed in line with the law. On the other hand, everything that led up to the sale, including the decisions adopted by the representatives of different administrations over the last ten years, is indeed problematic on several levels.




You said that the objective was to bring PKB back to life.


That’s right.


Why was then PKB not sold with its debts instead of selling only its assets?


Because you can only sell something that someone wants to buy. You can’t sell something just because you want to. No buyers were interested in buying a company with 80 million euros in debt. This is something they wanted to do and buy. This is the sale arrangement we managed to set up. We listened to the market and simply tried to gain maximum benefit for the country. I think that we succeeded.




Up to the privatisation in 2018, PKB was using around 74,000 acres of land. It owned facilities that were in good shape. PKB runs farming operations on 50,000 acres of arable land. The corporation irrigates around 13,000 acres of land annually. Its annual milk production stands at around 12,000,000 gallons. Its seed processing centre has a capacity of 23,000 tonnes, placing among the biggest seed producers.




Let me respond to what you’re so persistently claiming. If we failed to sell PKB, the taxpayers would have to bail it out the following year. Its debt was so big that 90% of what was sold went to the creditors. That’s how big the debt was! The following year this cycle would probably expand. The debt would probably grow even bigger. We would have to allocate funds from the state budget to pay the creditors. And one more thing. And this is what I can’t get my head around. What was the government supposed to do? Take out a loan of two hundred million euros and invest in paying the creditors? What would you have to say then?




PKB’s assets — which include land, buildings, equipment, and shares in subsidiaries — were sold for 104.7 million euros. The cattle herd — numbering around 22,000 head — was sold for 16.3 million euros. According to the payment transaction documents obtained by Insajder, the price of agricultural land spreading over 41,476 acres was around 80 million euros out of the total price paid. This means that Al Dahra paid around 4,700 euros per 2.4 acres.

According to the Republic Geodetic Authority, the average price of agricultural land in Serbia last year stood at 6,000 euros. The priciest land is in Vojvodina, where 2.4 acres of agricultural land can cost up to 18,000 euros.




Listen, you can’t look at it that way.

If you really did your homework for this, you must have read different agricultural policies explaining the prices of agricultural land. They grow up to a level of 100-200 acres. After a certain point, these prices simply start to drop. The market simply doesn’t have enough buyers ready to purchase five, ten, fifteen, twenty… The only thing I can conclude from your question is that you think we should have divvied up 5,000 different parcels of seven acres each and sold them that way.




The Ministry of Economy was in charge of the company’s privatisation.

However, the Ministry’s State Secretary Dragan Stevanović claims that all this was the best outcome possible for PKB’s privatisation.



What does the best outcome mean exactly? It’s a bit unclear.


It’s very simple and it’s right in front of you. It means securing continued production and continued employment for the people at the company. The buyers are obligated by the contract to keep the same number of employees and remain in business for three years.



At the time a portion of its assets were sold to Al Dahra, PKB had around 1,700 employees. Once the contract with Al Dahra came into force, PKB’s independent union’s President Milisav Đorđević said that Al Dahra offered an employment contract to every PKB employee. However, these contracts stipulated fixed-term employment of five months. Once this time expires, around 700 employees of the now new company Al Dahra Serbia might lose their jobs. One thing that is certain is that in the next three years Al Dahra is bound to hire 1,000 permanent employees. The contract stipulates 500 permanent and 500 fixed-term employees in the first year. In the next two years, the company must have 1,000 employees on permanent contracts. After three years, Al Dahra will be under no obligation concerning the number of employees. Under the contract, Al Dahra is also obligated to stay in the same business for three years, as is provided for by the Privatisation Law.




They are obligated to secure a 20 million euro bond every year, and there are contractual penalties in the event they fail to meet their contractual obligations.


For three years?


Yes, three years. After this time, they can do whatever they want with their company, their business, and their assets. But let me ask you this. Does it sound viable for someone to spend 50 million euros over two years and then just shut it down?


OK, but what’s going to happen in three years?


Brankica, we can’t know what tomorrow brings. I could leave this studio now and get hit by a car. Who can say? Listen, you shouldn’t be so negative and sceptical about everything.




Contrary to the notion touted to the public that the goal was for PKB to recover, the fact is that the company saddled with 80 million euros in debt was not sold. What was sold were its assets — around 42,000 acres of land, facilities, equipment, and cattle herds.

PKB, which on paper continued to exist, now owns around 27,000 acres of land, of which around 5,400 acres are urban construction land, while the remaining area includes communities constructed for workers that could not be sold in any event. The PKB retained ownership of the water supply system intended for these communities.




Not all assets were sold. What was sold was agricultural land, from which we excluded building plots, woodland, land with residential structures — all those things that we need for the city to grow.


Of course that the sale excluded Padinska skela and other communities because they can’t be sold.


One important thing is that — according to my knowledge and as I’ve been told by the Ministry of Economy — thanks to the sale, all debt was paid, as were all social contributions for the employees.




After settling what was owed to the government and the banks and paying social contributions for the employees, of the total sum paid by Al Dahra, around 12 million euros was left in PKB’s account.

Nothing was left for the Serbian state budget.




So, everything from the sale of assets was spent on…


That’s right. There will be 12 million euros left in PKB’s account.


So, what is the plan for PKB? Now that it has no more assets or equipment.


The plan is to resolve what we talked about just now. There are serious ownership and administrative issues that our predecessors — Đilas and the others — left intact and did not want to deal with, for whatever reason. We have that to resolve…


Wait a minute. The company…


The company is now empty. The company has two or three people who will finalize these procedures.




And the next step is probably liquidation.


You could have liquidated without selling the valuable land.


And what about the business?


But who can guarantee that they will remain in business after the three years? Who can guarantee that their business won’t be reselling the land?


What are they going to do?


Sell the land.


I can guarantee you that the land will not be repurposed while we’re in office. I’m asking you what they are going to do.


You can guarantee this?


I guarantee this.




We insisted that the land important for the city’s development be preserved and for the new partner to continue the agricultural production. These were our decisions, and the state administration respected them. As far as the sale process is concerned, as you well know, the city was not involved in it. But we do support them for finding a respectable partner that will continue the production in PKB.


But how can we be sure that the general plan won’t change in three years and that the land won’t be repurposed as urban construction land?


Well, how can we be sure that we won’t get hit by a comet right now? You are talking hypotheticals.


These are not hypotheticals. We’re talking about the people’s property.


And I’m asking you how you can be sure that this studio won’t collapse tomorrow or even now.


That is completely beside the point. We are talking about the property of every taxpayer in Serbia.


That’s what I’m talking about now.


About the comet?


No, I’m talking about agricultural land.


That’s what I’m talking about, too.


As the majority in the city administration, we adopted the present General Regulation Plan. And we did not repurpose the land. We kept the agricultural land, except for what we needed for the city’s development.




This investor will increase the capacities of PKB as we know it in terms of different forms of agricultural production, which will provide a much greater added value than we had. The situation was untenable. Our feelings have nothing to do with it. Economy knows no feeling. Feelings always end up costing.




Al Dahra paid a total of 121 million euros for PKB’s assets. It’s impossible to give a realistic assessment of whether this figure was low, not enough, or too much for the ruined PKB. A thing is worth what someone is willing to pay for it.

In 2018, Al Dahra was the only company that was interested in buying PKB. However, this is exactly what raises many other questions.


You as the government did not know that they wanted this model exactly?


If you’re asking me whether we rigged the bidding for Al Dahra — no, we did not.




The Privatisation Agency launched the first bidding round for selling PKB’s assets on 31 December 2015. The offer included 2,000 acres more than now — 43,680 acres of land. Everything else was the same as in the 2018 bidding round. The equipment, the facilities, and the shares in subsidiaries EKO LAB, PKB Agroekonomik, PKB veterinary station. The assets without the cattle herd were valued at 303.9 million euros.




The starting price stood at 51% of the estimated value, around 150 million euros. One condition for the buyers was that they had to be legal entities registered for agricultural production and breeding dairy cattle, as well as that the legal entity or its founder or parent company turned a profit from agricultural business of at least 50 million euros in the last business year. This attempt to privatise the company failed because no bids were submitted.




Not a single bid was submitted in the first round?


That’s right.


The government reduced the price and set significantly stricter terms for the buyers. In 2015, the buyer had to have an annual turnover of 50 million euros. In 2017, you set this figure at 400 million.


I believe that that was a good thing.


What was the reasoning behind this?


The reasoning was…


If there were no bidders the first time…


What are you saying? That those that have credibility and 400 million annual turnover are foolish to pay that much for something that’s not worth it? Let me tell you something. Those that do have a lot of money, those that do run profitable businesses are the ones that are very careful with money. These two things are completely separate to me. Our forecasts completely separated these two things.




On 19 January 2017, the media reported that the then Serbian Prime Minister Aleksandar Vučić had met in Davos with Khadim Al Darei, Managing Director of UAE’s Al Dahra. According to the reports, Vučić talked with Al Darei about investing in PKB.

“We’re prepared to do everything that’s good for Serbia,” Al Darei said at the time.




Was there a deal made with Al Dahra to buy PKB even before the bid was launched?




Was that the one buyer?


Nonsense! The only thing I can say to that is that this innuendo…


The call for bids was made one day after Mr Vučić and Mr Al Darei met in Davos?


What’s that got to do with anything? You can say that god-knows-what happened yesterday, and today I came to do this interview based on yesterday’s instructions. Nonsense!


So all this was coincidence?


I really don’t know what you want! Do you want PKB to fail? Is that what you want?


We’re talking about the bid.


I’m talking about the bid for PKB, too. I’m not talking about a bid for god-knows-what.




The new call for bids was made in 2018. Unlike the first bid — where there were no bidders and where the condition was for the buyer to have an annual revenue of 50 million euros — the new bid required the bidders or their owners to have a profit of 400 million euros.




This eliminated competition. Many domestic companies were unable to bid because they did not meet this requirement.


They told you that?


Not that exactly.


If they insisted so much on being interested, why did they not bid in the years before? All of a sudden, no one is interested! What does that mean? They’re interested only in front of the cameras? I don’t believe in those stories and spins. The market is the deciding factor to me. Everyone had a chance to submit a bid. Do you have any idea how many companies considered taking part? And thought that the price of 104 million euros was too high? Do you have any idea? You don’t. You weren’t interested in that.




In the end, the only interested company was Al Dahra. Talking to Insajder, Petar Matijević said that his meat production business Matijević was indeed interested in PKB, but they waited for the price to drop. Now that the price was lowered, he said, the bidding requirements prevented his company from taking part.




“Everything was clear right away. It was like when you want to enrol in a school and they tell you that you don’t meet the requirements. You just stop thinking about the school,” Matijević told Insajder.




MK Commerce’s owner Miodrag Kostić was also interested in buying PKB. He changed his mind without explanation.




All this looks like you set your sights on Al Dahra.


That is not true. Any company could have expressed interest.


How could they when you set a requirement of 400 million annually? Not a single domestic company could pass that mark.


That’s not true, of course they could have.


No one could meet the requirement.


You are wrong. We provided the option of consortium for those companies. Those that wanted to bid could have done so as consortiums and take part in the process. Literally anyone who wanted to bid absolutely could have done so freely.




On 6 July, the Serbian Government decided for the privatisation to have a single process that would offer part of the agricultural land and part of land intended for agricultural production, construction buildings used for business purposes, equipment, spare parts in stock, cattle herd, and shares in three subsidiaries. The state was to sell its shares in two subsidiaries, Eko lab and PKB Agroekonomik.

Just six months later, on 6 August, PKB adopted the Sale Programme defining the assets put up for sale. Over two days, the Programme was modified and amended and on 8 August the Ministry of Economy approved it. On the following day, 9 August, the Ministry of Economy announced the sale in the daily newspapers Politika and Srpski telegraf, as well as on the ministry’s website. One month later, on 13 September 2018, the announcement was made about Al Dahra being the only bidder and that the company was ready to buy PKB’s assets and subsidiaries for 105,055,000 euros. The so-called Master Agreement on the sale and purchase was signed already on 4 October 2018.





Well, you can point out anything as an issue now. You can say that it took two, three, five months… You can always speculate and talk hypotheticals like earlier. What if, why this, why that… You can throw doubt on everything that’s been done like that.


But these are facts. I read everything that they bought. They had 26 days…


Them buying it in 26 days is not an issue. They decided that they can buy it and they bought it. They are a powerful and serious company, too much so that they would sweat over a tyre or a chicken or any of that stuff you read. They were prepared to spend a lot of money on it. They’re also prepared to invest a lot of money. They are well aware of the value of the machinery. And I want to ask you this. Do you really think that what they paid for those tractors, harvesters, trailers, and what not was worth that much? How much the repair of all that cost? How many of those tractors that they bought will stay in service on that agricultural land? I truly think that they will repair and replace all that.


OK, but the main thing here is that 42,000 acres of land. State-owned land.


Alright, well, you know… It’s not state-owned, it’s PKB’s land.




In both bidding procedures, Deloitte was awarded the contract for the PKB asset valuation through contract awarding. Deloitte is a world-renowned auditing consultancy whose Serbian branch has been operating for years. However, the value it estimated is unusual because the value of PKB’s assets between the two rounds of privatisation from 2015 to 2017 dropped by 100 million euros. On top of it, this happened at a time when the prices of agricultural land both in Serbia and in Europe were soaring.




The Ministry of Economy, which launched and ran the PKB privatisation, refused to provide Insajder with the documents that contain the asset valuation with the explanation that the valuation was not done by the Ministry of Economy, but instead by the valuation service provider hired by PKB. At the same time, PKB did not respond to Insajder’s request at all.





Why is the asset valuation by Deloitte being kept secret?


I don’t understand. What do you mean ‘kept secret’?


The Privatisation Law does indeed stipulate confidentiality but only until the privatisation process ends. We requested the documents after it ended.


You asked after it ended? Alright, let me check that. I’m going to check.


Will you send us the documents?


I don’t know if I’ll send them. I have to check what the issue is.


But why is this information secret?


I have no idea. Why do you think it’s secret? Everyone knows the selling price!


Everyone knows the selling price, but no one knows what factors went into the asset valuation. The value changed over two years. In 2015 the estimated value was around 309 million, and two years later it dropped by a third.


This valuation was done in line with international standards. I think it reflects the reality of and the trends on the market much better.


But how did the value drop so much in two years?

Didn’t you think it was unusual?


No, not at all.





But we’re selling off and giving up 42,000 acres for…


Listen, that’s agricultural land. A thing is as worth as the offers it gets. The state had to do this. Otherwise, next year already the creditors would have to be paid what they’re owed from the state budget. The situation was not feasible anymore. We need investments in cattle farming, we need investments in agricultural land, in agricultural land quality and irrigation systems… That is what we’re getting with this.


OK. So, the land that was sold at 80 million euros is worth twice that. You’re saying that that was the price…


Who says that it’s worth twice that?


The valuations!


Valuations? Is that your valuation?


No, that’s the official valuation.


The official valuation, alright. And what does the law say? What is the starting price?


Fifty one.


So is that against the law?


It’s not against the law.


Then what?


The workers’ union representatives were saying that PKB was able to repay its debt…


With what?


…by selling the construction land. You know about the company’s construction land.


Oh, what if! You keep talking about some future, uncertain circumstances!


No. I’m talking about the options that the government had.


Why did that not happen while the city was in charge of it? During ‘the golden age of investment’, as they call it!


Well, I’m asking you now.


Well, I’m telling you — it was unrealistic…


And I plan to ask them, too.


It was simply not possible!


I’ve heard so many what-if scenarios so far!


Well, you asked me what the workers had to say.


And what do they say? The workers all received severance packages. They got new employment contracts. Al Dahra has obligations in terms of hiring employees.

Listen, this was a combined system of asset sale and obligations of the investor.

Was there a call for bids? Was everything in accordance with the law? 


Everything was in accordance with the law.


Finally, that’s what I wanted to hear you say.


I’m simply asking you what options the government had and why it chose this way.


This is the only way to obtain investments. You keep going back to historical issues, to land… You haven’t mentioned the investment a single time! This country is moving forward!





Attempts to privatise PKB were many over more than ten years. The government dropped the idea in 2009 by the decision adopted by the administration helmed by Mirko Cvetković. The then mayor of Belgrade Dragan Đilas says that he was the one who proposed it because it’s impossible to sell PKB for what it’s worth.




There is absolutely no way to sell PKB at a fair price. Why? Because PKB — the way I see its value — is worth nearly a billion euros. No company in this world would come to Serbia and pay a billion euros for a company like PKB. What does that mean? It means that it shouldn’t be sold in the first place. It means stopping for a second and thinking about the 42,000 acres of agricultural land, the silos, the harvesters, the tractors, everything that’s there. Are you a world-renowned company? OK. You can market these products? OK, let’s do it together. We’ll bring what we have to the table, you bring money and marketing. We’ll work together as Frikom. That was the vision for PKB.

And let’s not forget another fact. We repurposed the area along the highway as construction land. When I was in office, the land was sold at 800,000 per 2.4 acres. Only 240 acres of that land was enough to repay all PKB’s debt.


Why was that not done while you were in office?


Well, we did sell 14 acres.


Why not more?


Because the highway was still under construction. You have to have a highway first to be able to sell highway adjacent land. Let’s not forget, the Zemun–Borča bridge was completed a bit after I left office.




Insajder’s series Official (Mis)Use was broadcast in 2009, presenting evidence that showed how the privatisations after the democratic change in the country turned into selling and buying real estate property, instead of the economic recovery it should be. In just a few years, this possibly stripped the state and city budgets of two billion euros. By buying ruined factories, certain individuals acquired luxury land parcels.

Luka Beograd, Partizanka, Bigz, and Brodogradilište are just some of the companies that were being sold off to businessmen through privatisation, shares, or bankruptcies. Most factories were shut down. And the businessmen acquired land in exclusive locations this way. After the series was broadcast, the law was amended to retroactively return the money to the budget. In addition, the government decided to save PKB.





I was against it. Ideas were floated around about privatising it, about selling it to mainly domestic businessman. The company was in a lot of debt. The idea was probably to buy it for some ridiculous sum, even less than today. I was against it. I asked the then President Boris Tadić and the Government for support to transfer the ownership to Belgrade. I thought that it would be senseless to sell it, and then buy off the land that was ours before that.




In 2009, the Serbian Government decided to take over PKB on the grounds that the company was using state-owned land. The Property Directorate of the Republic of Serbia and PKB entered into an agreement that year pursuant to the Law on Property Owned by the Republic of Serbia, which stipulates that the state must determine which legal entities are using its property and based on that establish the state’s share in those entities.




The government registered as the owner of 99.9% of shares in the PKB joint-stock company. According to Insajder’s learnings, six years later, in 2015, this agreement served as basis for the Government’s questionable ruling that allowed for the land to be registered as PKB’s property and as a result sell 42,000 acres to Al Dahra.





That doesn’t mean that the next day you have the right to sell the land claiming that it’s owned by PKB and not the state. Same difference!


Were you planning to sell the land when you wanted PKB to be registered as the owner?


No, not at all. Why would we boost PKB’s value if we wanted to sell it? There was no mention of selling PKB. If you want to sell something to someone so that someone could benefit, you try to decrease the value, not increase it.




Thanks to the fact that different government institutions were applying different laws, which they even interpreted differently, the sale of 42,000 acres of land was enabled. According to Insajder’s research, this was possible because the land was essentially state-owned. In real life, however, it was privately owned.




In 2010, the government gifted its shares in PKB to the City of Belgrade, which became the owner of more than 99% shares in PKB and acquired management rights. One year later, the government, Property Directorate, City of Belgrade, and PKB entered a new agreement that explicitly gave PKB control over the assets brought into the company by the government as if it was privately owned, despite the City of Belgrade being the biggest and nearly the only shareholder. The city now had the right to register as the owner. In 2012, the first application was submitted to convert the rights of use to rights of ownership. However, the application was opposed by the State Attorney’s Office and the Real Estate Cadastre.




I’m well aware that even the road to hell is paved with good intentions. But let’s not make the people who fought to save, not sell, and grow the business out to be even less than those who used all that to enable their friends or partners to buy it at ridiculous prices. Maybe you’re right in saying that we made a mistake back then. But we certainly did not mean to sell PKB. We wanted it to prosper. Why state-owned? Because the state owner of PKB won’t buy a private jet or six more houses, instead it will invest as a socially responsible company everything that it owns.

I trust that you have done your homework for this series, and I grant you that it might be contrary to some other law and that it can’t be treated the same.


But you’re the one who signed the agreement and enabled this to happen today.


No. We enabled PKB to be the owner of property, and the government to be the owner of PKB. And then came along some people who decided to take our entirely righteous efforts and use them for their creative interpretations of the law in order to sell the land and turn it into an Arab company. Of course I did not enable that.


Wait a second. PKB was trying to register as the owner of the land since 2012.


I can’t tell you much about legal matters. That’s not my area of expertise.


At that time, the State Attorney’s Office and the Real Estate Cadastre raised a concern. Administrative disputes were underway. It just wasn’t working out.


Has anyone during my time in office used influence to make those disputes end in certain ways?

I still believe that what I talked about was principled and in accordance with the law. If the government used the fact that PKB is using state-owned property to register as PKB’s owner, the logical conclusion is that the property is owned by PKB.




The sale of state-owned agricultural land was banned in 2006 by the Agricultural Land Law. The law was adopted precisely because of the various schemes that preceded it. Up until 2006, one of the ways for businessmen to acquire state-owned agricultural land was through privatising agricultural corporations. These corporations were sold by the Privatisation Agency as social enterprises, which had the exclusive right of use over state-owned agricultural land.

After the time period in which the Agency had been monitoring the fulfilment of contractual obligations expired, the new owners registered with the Real Estate Cadastre as owners of state-owned agricultural land using only a certificate that said they met their contractual obligations.




According to the Agricultural Land Law adopted in 2006, agricultural land represents a public-interest resource. Agricultural land that is state- or privately owned cannot be privatised since this law passed.


Are you aware that the law prohibits the sale of state-owned agricultural land?


But we were not selling state-owned land. It was PKB’s land.




On 18 December 2015, as proposed by the Ministry of Economy, the Serbian Government issued an opinion that ordered the State Attorney’s Office to withdraw all complaints that contested PKB’s right to register state-owned land as private property.




“The Government concurs that the State Attorney’s Office should not initiate legal proceedings and that it should withdraw its administrative dispute complaint against the final acts by the Ministry of Construction, Transportation and Infrastructure that decide on the registering of ownership rights of PKB korporacija a.d. Beograd over real estate property that are in line with the agreement entered (in 2011) by and between the Republic of Serbia, City of Belgrade, Property Directorate, and PKB registered as property that is owned by the company.”





On 23 December 2015, the State Attorney’s Office withdrew the complaint. PKB registered with the Real Estate Cadastre as the private owner of the land that was up until that point registered as public property. This ended any court disputes and enabled PKB to register as the owner of state-owned land. Despite the fact that the law prohibits the sale of state-owned agricultural land, this created the legal conditions for PKB to sell the land as if it was private land owned by a private company.




This ruling actually ended the administrative dispute.


The whole point is to conduct privatisation. As you said yourself, the basic precondition is that you can’t sell land that is not owned by the company that is being privatised. The government did everything to create conditions in order to sell land that is owned…


In order to create legal loopholes!


That is not true. That is the point of government, to make decisions that are in the country’s best interest. And PKB is not the only case. A number of companies that are being privatised in the Republic of Serbia are having problems or have had problems until now because the property was not registered to their benefit. This is being resolved. You’re making a fuss about nothing.




You keep telling me that PKB should remain state-owned and that the government can be an excellent manager of the company, but alas someone in the government has been intent on ruining PKB for the last twenty years.


Excuse me, but I have to say that you’re completely twisting my words.


I’m not twisting your words, I’m talking about it.


I didn’t say that the company should be state-owned at any point.


What do you mean you didn’t? You said that state-owned agricultural land should not be sold, that it should remain state-owned. That’s what you said.


State-owned agricultural land is owned by all the people of this country.


Again! Again you speak of…


According to the laws of this country!


Brankica, you’re talking like a hard-line communist.


Why did you pass the law that prohibits the sale of state-owned agricultural land?


Are you trying to tell me that the Serbian Government failed to adhere to its own laws? Is that what you’re saying?


That’s right.


That is not true.

That is impossible.


The ruling made it so that it’s breaking the law.


No ruling can ever change the law.


That is exactly the issue. How did PKB manage to register as the owner?


That is not true.


You gave up agricultural land that is the most valuable resource of any city.


And we gave it over to the state government.


And the state government sold it to Al Dahra?


What you’re saying is not true. I’m telling you right now, the City of Belgrade should not focus on agriculture. For us, it’s important for agricultural production to grow.




At end-2010, the state government gifted PKB to the City of Belgrade. In 2016, the City of Belgrade returned PKB to the state government. In 2018, the state government sold PKB to Al Dahra.



It’s like I’m talking to someone from the 1970s. As if someone can take the land out of the country! Can that land be taken out of the country?


You are not making any sense. You're being a demagogue right now.

Of course they can’t take the land out of the country, but they can take the money!


Now you’re the one who’s the demagogue.


No, I’m not.


Yes, you are.


We had so many examples from the past where a factory would be sold and instead of its business recovering, luxury apartment buildings would start to pop up.


How? How?


How what?


How would they turn it into luxury apartment buildings?


By first buying a ruined factory on the cheap…


No, no. It’s by paying sky-high conversion fees! Is that not right?


Now you’re defending the previous administration.


No, no. I’m telling you, the government — the administration before this one and Boris Tadić — introduced the conversion.


But it was already too late!


How many conversions were there after your series? Do you even know?

Please don’t talk about things you don’t know. Don’t talk about people buying factories and paying conversion fees… And let me tell you, the conversion fee was no cheap feat! And as far as I know, only one conversion was successful since you started the conversion thing.


I’m trying to tell you that agricultural land is a very valuable resource of any country.


Everything is a valuable resource!


Yes, and you could have done it another way.


Agricultural land is of value to the country if it’s being used for production. If there’s no production, it has no value for the country. Understand?


I completely agree with that.


Well, if we managed to agree about that, then we should also agree that it’s completely irrelevant if agricultural land is state-owned or privately owned if it’s being used for production because it can’t be taken anywhere.


But it can be sold!


We’re living in capitalism, of course it can be sold.


Why is it then that the government didn’t sell it one parcel at a time? Why did it allow Al Dahra to do it?


Because that was the only way to find a strategic partner.





Until the privatisation in 2018, PKB was a joint-stock company, with Serbia’s ownership stake at 99%. In legal terms, a joint-stock company is a private company. However, in this case it is a private company that is owned by the state. On the one hand, the state is treating PKB as if it was a private company that has its own private property and private land, which is completely nonsensical because PKB is essentially a company owned by the state, which means that the land managed by PKB is state-owned.



The state must be registered on everything that it owns. Full stop.


And whose land was this?


The state’s. State institutions passed acts that say that the land is owned by the state.


PKB’s land is state-owned?


PKB… Everything is rounded out exactly as it says in….


The Agricultural Land Law prohibits the sale of state-owned agricultural land. How did we sell 42,000 acres?


But that is owned by PKB.


You said just now that it was state-owned.


I was talking about when the land’s boundaries were being defined. You’re obviously mixing the two.


OK. Let’s try this.


Listen, this was a legal entity that was sold!


Let’s talk in legal terms. According to the 2009 agreements, which both the Real Estate Cadastre and State Attorney’s Office contested, after which the Attorney’s Office was prevented from contesting the government’s decisions in 2015, they are registered as the official legal owner. PKB is a state-owned company. The company was using state-owned land. How’s it possible that all of a sudden it’s no big deal to sell it and it’s not state-owned anymore?


PKB was state-owned and it was sold as such. PKB’s property was sold.


Was state-owned agricultural land sold?


PKB’s property!


I still don’t understand.


I could stay here 24 hours and you still wouldn’t understand!


The Agricultural Land Law is in the purview of your ministry.




Does this law prohibit the sale of state-owned agricultural land?


It doesn’t prohibit the sale of company land.


Excuse me?


The company land. The land that is under the company.


Is that land state-owned? Back at square one.


Back to square one. You’re obviously mixing two different things. We sold the property of PKB! Property that is registered as PKB’s.


It was registered as PKB’s just before the privatisation. The government ended the disputes…


Jesus Christ! I really don’t know what you want! Are you trying to say that we sold something that wasn’t PKB’s? Is that what you’re saying?


PKB is state-owned, it uses state-owned land… Who is the owner of the land?




OK. Again, the Real Estate Cadastre and the State Attorney’s Office were resolute that that was against the Agricultural Land Law.


Has that proceeding ended?


It ended with the government’s ruling.


Were there any legal remedies after that?


Everything ended with the government’s ruling that ordered the State Attorney’s Office to withdraw any complaints it might have.


If there’s something that is nonsensical, that has no purpose, of course the government will get involved.


According to Insajder’s information, the implementation of the decision to register PKB as the owner lasted a full six years. The State Attorney’s Office filed complaints and initiated administrative disputes up until 2015, when the Serbian Government adopted the ruling that ordered the State Attorney’s Office to withdraw from the disputes and to allow PKB to be registered as the owner of the land. If not for this, the agricultural land used by PKB could not have been sold at all.


I think that everything was done in accordance with the law, in a transparent way. We found an investor that will be good for Serbia. PKB will see only better days ahead. Period.




Even with the agreements, decisions, and laws, the State Attorney’s Office and the Real Estate Cadastre — referring to the law prohibiting the sale of state-owned agricultural land — did not allow PKB to register as the owner of the land up until 2015.





Earlier that year, the Ministry of Construction as the second-degree authority annulled the Cadastre’s decisions and allowed the land to be registered as PKB’s private property. Any complaints by the State Attorney’s Office contesting this were prevented by the Serbian Government’s ruling.




The administrative disputes were not annulled.


Effectively, they were.


That is not possible. The Administrative Court said PKB had the rights, based on the submitted documentation.


The State Attorney’s Office complained. I don’t know if you know this. I suppose you do, since it was your ministry that proposed that the Serbian Government adopt this ruling.




This means that the disputes lasted for years. Both the State Attorney’s Office and the Cadastre first said that it should not be allowed.


And you don’t find it suspicious that they lasted and dragged out for years? Someone doesn’t care much for the privatisation.


Wait a second. Competent institutions determined that PKB could not be registered as a private owner of land.


But the institutions said that it could be registered.


What institutions? The Serbian Government?


And what is the Serbian Government?


The Serbian Government cannot make a law null and void with a simple ruling.


The Serbian Government did not annul any laws.


Maybe I’m not getting this right.


Go ahead.


A ruling. The Serbian Government passed a ruling as proposed by the Ministry of Economy. You are the Ministry of Economy’s state secretary.

“The Government agrees that the State Attorney’s Office should not initiate administrative disputes and that it should withdraw from the administrative dispute complaints against the final acts…”

This ruling asks the State Attorney’s Office to stop launching administrative disputes so that PKB can be registered as the owner.




They refer to the 2019 agreement.


And why is it an issue that PKB became the owner of the property?


Because otherwise you couldn’t sell the land.


Do you understand that the Government’s main idea was to bring the privatisation to its end? Do you understand that?


But you could end the privatisation by finding someone that wants to buy PKB and that can commit to continuing the production, repurpose part of land as construction land, you sell it, the money goes to the state budget…


And what if that someone doesn’t want to do it?


How can you know that they wouldn’t?

How do you know that?


If that was possible, it would be sold.


But you didn’t even try it that way.


We didn’t because we couldn’t sell it that way. Because no one wants that.


OK. Can you please just explain why they adopted this ruling as you proposed? What was the idea exactly?


The idea was to bring PKB’s privatisation to its end.


All of a sudden, the government is acting as if PKB was a private company managing private land and PKB is registered as the owner. In other words, we have a private company as a joint-stock company owned by the state that uses state-owned land as private property.


The property is registered as privately owned property. The company is not private, it’s state-owned.


But the Cadastre and the State Attorney’s Office said that it wasn’t allowed and that it was against the law.


Which law?


The Agricultural Land Law, the 2011 law. That’s what initiated the administrative disputes.


The Agricultural Land Law prohibits the sale of agricultural land that is state-owned. Once the land becomes owned by the legal entity PKB, it can be sold.


But PKB is owned by the state!


What’s that got to do with it? It’s a legal entity! This applies to any company where the state government has at least 50%! Everything is perfectly clear. This land cannot be taken out of Serbia. No one can repurpose this land now as anything else other than agricultural production by the company that is now called Al Dahra and that was called PKB before that. This new company will produce everything that was produced before. It will produce milk. Things that were of crucial importance for Serbia. It will employ 1,000 or 200 or 300 or 500 or 700 people, depending on the technology and the technological developments at the company. Whatever the production optimisation requires. There’s nothing unclear about this. This is what’s important for Serbia — to stop wasting time on the government’s managing of companies because this is the root cause of all abuses, all problems, all ruined businesses, all debt that all of us were straddled with.


However you look at it, it’s state-owned land. And state-owned land can’t be sold. It doesn’t matter that you used a legal loophole to make it owned by Al Dahra!


Brankica, Tito is dead! Do you understand that your reasoning would make it impossible for anything to be sold or privatised in Serbia?



The sale of 42,000 acres of state-owned agricultural land that is registered as owned by PKB was in the end officially allowed under the Privatisation Law and at the same time prohibited under the Agricultural Land Law. The responsibility for all this from 2009 until today — through various agreements, a gift contract, and finally the Serbian Government’s ruling — lies with the government officials in the last ten years. At the same time, PKB’s business in the last two decades was marked by many controversies, debt write-offs, and accusations between the present and the previous administrations. Find out more about this in the next episode of Insajder.