nedjelja, 1. listopada 2017.

Sarajevo and Barcelona - Friends Forever (28/08/2017) - translation of the extract from the article published by STAV

Translation of the extract of the article published by The stav magazine

Full article available at: http://stav.ba/barcelona-vise-od-grada/ 

BARCELONA, MORE THAN A CITY
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The authorities and citizens of Barcelona organized dozens of charities and spent millions of EUR to aid Sarajevo. They felt the tragedy of Bosnians and Herzegovinians as their own. Barcelona is a city that established the 11th city district and called it Sarajevo District. During the years of war, the citizens of Barcelona were collecting money and humanitarian aid for Sarajevo. Every Monday at 08:00 in the evening they were gathering in front of the City Hall and expressing their protests against the siege of the capital of BaH with a minute of silence.  

Sarajevo paid its respects to the victims of terrorist attacks in Barcelona and Cambrils, in which 14 persons were killed and over a hundred were injured. The letter of support to the citizens of Barcelona was addressed by the Mayor Abdulah Skaka, Reis-ul-ulema Husein Kavazovic, sportsmen, artists … Ibrahim Spahic, a president of the International Peace Center organized a performance in the Tito Street:"We are all one genus, stop the terrorism”. Fatima Mehmedovic and Nejla Komar, students of the Music School in Sarajevo to pay respects to all victims of terrorist attacks, not only in Spain, but all over the world performed Albinoni's Adagio,  a piece that during the siege of Sarajevo was performed every day at noon for the victims of terror against the city (Sarajevo) and its citizens at the alley La Rambla. “La Rambla is a symbol of freedom and the place where together with Pasqual Maragall we marched for peace and lifting siege around Sarajevo. They even named one block in Barcelona after Sarajevo", said Spahic....
“CALL FOR SARAJEVO”
...
After the war, their assistance was mainly addressed via the Embassy of the Local Democracy (note by blogger: for further explanation on this NGO see bellow the article). 
For example, a fundraising event was organised in Barcelona named "Call for Sarajevo", which, by having people dial the humanitarian hotline, collected money for the reconstruction of the book fund of the National Library. The hotline was dialed by 300 thousand people. In 1996 Barcelona donated 205 thousand euros for the reconstruction of the Kosevo stadium, at which the athletic event "Meeting of Solidarity" was held. The first organised tour group to visit Sarajevo after the war came from Barcelona and consisted of 50 people. Barcelona donated two buses to GRAS. A total of 2.887.000 euros was donated for the reconstruction of apartments in the Mojmilo residential area. Aside from that, 650 thousand euros was donated for the reconstruction of the clinic, and another 150 thousand for the kindergarten facilities. 250 thousand euros was donated for the reconstruction of 80 houses in Hadzici and Tarcin municipalities. The Olympic Hall Zetra was reconstructed with the help of Juan Antonio Samaranch and Barcelona. Barcelona donated 150 thousand euros for the reconstruction of the "Kamerni Teatar 55" theater. Money was donated for the hospitals of Sarajevo and Tuzla, for books, promotions, concerts, student visits, businessman visits...
When the war began in Kosovo, 400 thousand euros was donated for the refugees from Kosovo accommodated in the Sarajevo area. 50 thousand euros for the shelter, 120 thousand euros for the reconstruction of the primary school in Semizovac... And that's just a part of the money and some of the projects that Barcelona organised to help Sarajevo and Bosnia and Herzegovina. Since November 2000 Sarajevo and Barcelona are twin cities, and the Catalan cities Sankt Perptu and San Sebastian are the twin cities of Tesanj and Gorazde.
... The heads of FC Barcelona were also involved in humanitarian missions. Ramon Pujol, a member of the club's administration, a head of the club protocol, spent three months in BaH during the war as part of a humanitarian mission. He took an unpaid leave and arrived to BaH. He came back when the company he worked for  threatened to fire him. "I felt like Bosnia was a place that I needed to help, and I did just that, and not because it'd look good in my biography later on," stated Pujol. Spanish humanitarian aid workers came to BaH for the first time in 1992, arriving to Pazaric and to the mountain Igman. During three years of the war they drove in 105 trucks of humanitarian aid, mostly food and clothing, and through this organisation, 107 refugees from BaH departed to Catalonia. It's interesting that three Catalan aid workers managed to get married during their stay in BaH. According to some calculations, a total of 2.000 tonnes of food was delivered to BaH.
In 1994, during the war, Catalan humanitarian aid workers fully equipped the hospital in the Suhodol residential area, and three years later, rebuilt the destroyed school in Lokve from scratch. They built bleachers, a tartan-track and a management building on a stadium in Hadzici. These establishments were formally opened in 2005 by Joan Laporta, the then-president of FC Barcelona, one of the heads of the Catalan humanitarian organisation "Accio Solidaria Igman Catalunia", which organised dozens of humanitarian actions for BaH, from the reconstruction of houses, mine removal projects to memorials dedicated to Srebrenica.
Laporta came to BaH on the 11th of July 2005, visited Mostar and Sarajevo, and intended to attend the commemoration of the victims of the Srebrenica genocide, but, due to security reasons, the organisation of that trip wasn't possible..
Near the very end of the siege of Sarajevo, a visit was made by the delegation of the Barcelona City Council. The summer of that year was marked in Barcelona by protests organised due to the long-standing siege of Sarajevo, continuing even after the fall of Srebrenica. The main initiator of those protests was the late Jose Maria Mendiluce, who saw the beginning of the war in the BaH as one of the heads of UNHCR, and witnessed the murders committed by the White Eagles (Beli Orlovi) in Zvornik in 1992. During the war, the citizens of Barcelona were collecting money and humanitarian aid for Sarajevo. Every Monday at 08:00 in the evening they were gathering in front of the City Hall and expressing their protests against the siege of the capital of BaH with a minute of silence. Even though the "set" of people in charge in Barcelona and Catalonia has changed since 1992, the wish to help Sarajevo remained the same.
BARCELONA AND SREBRENICA
The artists and journalists of Barcelona often dealt with Srebrenica, talking about and reminding the people of the genocide in the town. Along with gatherings in the years during the war, almost every summer, manifestations are held at which it's spoken about the events in the former UN enclave. For example, the citizens of Barcelona marked the 16th anniversary of the Srebrenica genocide by gathering on the Sant Jaume square. At the gathering, the messages of mothers from Srebrenica as well as the letter from General Jovan Divjak, were read, along with the letters of the Catalan NGOs. The citizens of Barcelona honoured the victims by lighting candles. During this gathering, they also demanded the release of General Jovan Divjak from detention**. In the General's letter which was read in this occasion it was stated: "I am honoured to be able to thank you for your tribute, for your remembrance of the highest scale genocide in Europe after WW2, the genocide committed against Bosniaks Muslims in Srebrenica. The truth about Srebrenica is denied by Serbian nationalist-chauvinists, so thank you for not forgetting the over 8.000 killed in just five days in July, 1995 right before the eyes of members of the UN."    
In 2008 the monograph Srebrenica by Tarik Samarah was translate to Catalan and launched in Barcelona in 4.000 copies on the 10th of July. Photo-journalist Alfons Rodriguez was awarded on the 11th of November, 2010 in Sevilla a national journalist award for his reportage from Srebrenica, published in El Mundo
...



*The Foundation of Local Democracy has stemmed from the international organization Embassy of Local Democracy Barcelona-Sarajevo, founded in 1996 upon the initiative of the Council of Europe, with the aim of linking and twinning with other European cities, the development of democracy, cultural exchanges, and socio-economic development. During the existence of the Embassy of Local Democracy, it has implemented over 300 projects. The projects were implemented in the areas of reconstruction, sustainable returns, health and social care and education.In January 2003, the registration was renewed as a local organization - the Foundation of Local Democracy, as the legal successor of the Embassy of Local Democracy Barcelona-Sarajevo. More info available at: http://www.fld.ba/stranica/donors

** In March 2011 General Jovan Divjak was arrested by the Austrian authorities at the Vienna airport following the arrest warrant issued by Serbia for the allegations that he had committed a war crime in the "Dobrovoljacka Street" case in 1992 when the soldiers of the Yugoslav People's Army (JNA) were attacked in the process of withdrawal from Sarajevo.  









srijeda, 27. rujna 2017.

Triland Development owned by Texan Tie Sosnowski started to build ALTA (2007) and other articles on Sosnowski

Izvor: Dnevni avaz | Četvrtak, 26.04.2007.| 09:22

Triland Development počela izgradnju Alta centra u Sarajevu - investicija vrijedna 70 mil KM



Američki ambasador u BiH Daglas Meklheni (Douglas McElhaney) jučer je ( 25.04.2007.) u prisustvu brojnih zvanica položio kamen-temeljac budućeg šoping centra "Alta" na Marindvoru u Sarajevu.
Centar na 23.000 kvadratnih metara gradi "Triland Development", grupa u kojoj su četiri sarajevske kompanije u američkom vlasništvu.
Prema riječima ambasadora Meklhenija, centar "Alta" je do sada najveća američka investicija u BiH. "Alta" neće biti nešto američko, već će omogućiti američkim biznismenima da daju značajan doprinos bh. ekonomiji - kaže Meklheni.
Direktor "Triland Developmenta" Taj Sosnovski (Tie Sosnowski) govorio je o planovima kompanije koja će, kako je rekao, u naredne tri godine uposliti stotine građevinskih radnika i otvoriti 360 novih radnih mjesta.
"Danas počinjemo gradnju "Alte", a uskoro ćemo proslaviti početak radova na novom projektu, 300 metara od ovog mjesta. Obećavam da ćemo za dvadesetak mjeseci imati najljepši i najmoderniji trgovinski centar u ovom dijelu Evrope" naglasio je Sosnovski.
Podrška razvoju grada
"Već smo izgradili objekt Koševska Hills i adaptirali zgradu Grčke ambasade, što je samo početak. U centar Sarajeva namjeravamo uložiti više od 70 miliona KM, a posredno, kroz sedam miliona KM poreza godišnje, pomoći ćemo da grad postane još ljepši i da posao dobije što više ljudi" ističe Sosnovski.

Board of directors

The FIC is managed by the Board of Directors that sets the course of activities FIC, operates the current affairs, promotes its aims, approves programs and development plans, decides on the organization and participation of the FIC in relevant public events in accordance with its objectives.
Members of the Board of Directors are elected by the General Assembly. Board meetings are held every three months. The Board of Directors elects the following: the President, the Treasurer. Specialized Implementations Teams are established by the decision of the Board of Directors.
For the full list of powers of the Board of Directors please check the Statute.
Members of the FIC Board of Directors are: CMS Reich-Rohrwig Hainz, Carmeuse, EBRD, Fabrika cementa Lukavac, HeidelbergCement Group, Japan Tobacco International, Karanovic & Nikolic, Marić & Co Law firm, Messer, m:tel, PricewaterhouseCoopers, Wolf Theiss.

President of the Board of Directors

The President of the Board of Directors provides general leadership of the FIC. The President is authorized to represent and to organize the activities of the Council.

Tie Sosnowski founded Triland Development in 1995. Mr. Sosnowski serves as a Founding Member and President of FIC (Foreign Investors Council) and is also a founding member and currently serves as the 2nd Vice-President of AmCham (American Chamber of Commerce) in BiH. Mr. Sosnowski serves as a Director of Triland Development. He is a founding member of BREA, the Bosnian Real Estate Association. He graduated with a B.A. in European History from Washington and Lee University. ...












Novi predsjednik Vijeća ino-investitora BiH Tie Sasnowski

 Objavljeno u PRIVREDA
SARAJEVO, Na svom redovnom zasjedanju Upravnog odbora Foreign Investors Council (Vijeća stranih investitora) BiH izabran je novi predsjednik Tie Sosnowski, te je formirano nekoliko radnih grupa, saopšteno je iz Vijeća.


Sosnowski, državljanin SAD, je generalni direktor firme čija je glavna djelatnost gradnja nekretnina “Triland Development”, a koja djeluje u SAD-u i Bosni i Hercegovini. “Triland Development” trenutno gradi Alta Shopping Centar na Marin Dvoru u Sarajevu. Sosnowski je diplomirao na Washington and Lee University i živi već nekoliko godina u BiH.
Pored toga, Odbor je kao blagajnika Vijeća stranih investitora imenovao Alexander Paine-a, koji je direktor pri Horizonte Venture Management-a, d.d. regionalne kompanije za investicije. Paine je prethodno bio generalni menadžer IFC-a (Medjunarodna korporacija za financije, ogranak Svjetske banke) pri projektu za razvoj privatnog sektora u jugoistočnoj Europi (SEED), te takodje živi u Sarajevu već nekoliko godina.
Prvi predsjednik FIC-a, Mark Davidson, prešao je na novu poziciju unutar PriceWaterhouseCoopers u Zagreb, Hrvatska.
Odbor se takodje saglasio da formira savjetodavnu grupu, kao i nekoliko grupa za implementaciju koje će biti fokusirane na pitanja istaknuta u FIC Bijeloj knjizi za BiH u 2007.godini. Grupe za implementaciju će raditi na specifičnim ekonomskim problemima koji su proizašli iz Bijele knjige za BiH u 2007. te će biti usmjerene kao pomoć vladama i drugim odgovarajućim agencijama u pronalaženju konkretnih rješenja u BiH poslovnom okruženju.
Foreign Investors Council / Vijeće stranih investitora BiH je udruženje koje predstavlja interese stranih kompanija u BiH. Ciljevi Vijeća uključuju poboljšanje uslova investiranja i poslovne klime u Bosni i Hercegovini, te promociju komunikacije, kooperacije i dijaloga koji je u toku izmedju Udruženja i odgovarajucih predstavnika vlasti Bosne i Hercegovine.


KK Triland was founded by Tie Sosnowski, the owner of Triland Development, in June of 2007. Mr. Sosnowski’s goals for forming a professional basketball team in Bosnia and Herzegovina (BiH) was to provide another opportunity for Triland Development to become involved in the local community and “make a difference” in the future of BiH. Sosnowski feels that “sports are a great equalizer and have served to break down barriers across social and racial lines in America,” and hopes KK Triland can provide the same platform in BiH.

Triland Development - News Archive
www.triland.net [cached]

World Investment News, Interview with Tie Sosnowski
WORLD INVESTMENT NEWS, INTERVIEW WITH TIE SOSNOWSKI Tie Sosnowski discusses the Foreign Investors Council and doing business in BiH SARAJEVO - Triland Development Chief Executive and Foreign Investors Council President of the Board, Mr. Tie Sosnowski, spoke with World Investment News recently about the Foreign Investors Council and doing business in Bosnia and Herzegovina. Tie Sosnowski, FIC President of the Board of Directors and CEO of Triland Development stated that "BiH has been affected in many ways by the economic and financial crisis; the economic downturn hit exports and imports, inflow of foreign investment and public spending. Tie Sosnowski the team owner on the season, our goal was to play hard, win games and help our community as much as possible. Tie Sosnowski, a US businessman working in BiH, is without doubt the most interesting individual among the numerous community of foreign businessmen. Sosnowski is the founder and owner of Triland Development, a company that built a residential villa in Koševo a few years ago, probably the most luxurious building in the entire BiH. In the very center of the city, next to the two UNITIC skyscrapers, Sosnowski has just started constructing a large retail building of 23,000 square meters. Through his company, Sosnowski is present in some other countries in Europe and America, but the main ambitions of this US businessman are related to BiH and Sarajevo, where he had taken up residence as early as five years ago. As a veteran in the foreign business community in BiH, Sosnowski was appointed the President of the Foreign Investors Council last year, and is also the current Vice-President of the American Chamber of Commerce in BiH. Sosnowski has demonstrated his high level of integration into the social life of the city in a rather unusual way: in the summer of last year, he formed the professional basketball team "KK Triland" in Sarajevo and has brought a few promising players from other teams. Sosnowski himself used to play basketball while studying at the Washington and Lee University. SOSNOWSKI WELCOMES AMCHAM PARTNERSHIP WITH US EMBASSY US Embassy Sarajevo website - December 13, 2007 SOSNOWSKI WELCOMES AMCHAM PARTNERSHIP WITH US EMBASSY Sosnowski stressed that AmCham would continue to contribute to the development of a healthy business climate and to improving conditions not only for its members, but also for other businesses operating in Bosnia and Herzegovina. SOSNOWSKI ELECTED PRESIDENT OF FIC Dnevni Avaz - October 26, 2007 SOSNOWSKI ELECTED PRESIDENT OF FIC SARAJEVO -- The Steering Board of the Foreign Investment Council B&H elected as its new president Mr. Tie Sosnowski, the general director of Triland Development, which operates in USA and B&H. At this moment, Triland Development is constructing the "ALTA" Shopping Centre in Marijin Dvor in Sarajevo. "I haven't built anything in the RS, but it's the next target," said Tie Sosnowski, over a coffee at an upscale cafe in Sarajevo's Holiday Inn. Mr. Sosnowski, a Texan who broke ground in April on a 23,000-square-meter, almost $30 million shopping center in Sarajevo, said the entity's lower taxes are appealing, as is its relatively streamlined bureaucracy. The Federation's "permitting process is a labyrinth," he said. Tie Sosnowski, who represents Mr. Crow in the region, says it has taken more than two years to wade through about 50 procedures required for getting a building permit, including changing the property title, getting architectural drawings approved and extending utilities to the site. "When I try to get the permits, there are Serbs, Croats and Muslims who are so fractured that no one wants to take a decision," says Mr. Sosnowski, who says he has completed all but a few steps for obtaining the permit. Mr. Crow shifted to Bosnia after deciding that Moscow was too "risky and corrupt," according to Mr. Sosnowski, his regional representative. But Russian bureaucrats levied new taxes that, unless paid, would have prevented the Dallas investor from moving his money out of the country, Mr. Sosnowski says. "We ended up with profits in the mid-teens," he says.

www.kktriland.net [cached]
Triland Development was founded by Mr. Tie Sosnowski and is a group of companies which owns, develops, and manages real estate assets including office, residential and retail properties in Bosnia and Herzegovina.
Triland Development is affiliated with Crow Holdings, one of America's leading real estate development companies.

Izvor: eKapija | Utorak, 11.03.2008.| 16:09

Novi Upravni odbor FIPA - e

Prva, konstitutivna, sjednica novog Upravnog odbora Agencije za unapređenje stranih investicija u BiH (FIPA) održana je u Sarajevu, 6.3.2008. godine.
Nakon što je mandat ranijim članovima istekao 31.12.2007.godine FIPA je zatražila od nadležnih institucija i asocijacija da imenuje svoje članove u Upravni odbor FIPA-e. Dva člana imenuje Vijeće ministara BiH, po jednog člana imenuju Vlada Federacije BiH i Vlada Republike Srpske, jednog člana imenuje Vanjskotrgovinska komora BiH, dva člana predstavljaju poslovnu zajednicu u Bosni i Hercegovini, na način da po jednog člana imenuju Asocijacija poslodavaca Federacije BiH i Savez poslodavaca Republike Srpske, dva člana predstavljaju zajednicu stranih investitora u Bosni i Hercegovini a imenuju se od Udruženja stranih investitora u Bosni i Hercegovini.
Novoimenovani članovi Upravnog odbora FIPA-e su Tarik Đođić, Tie Sosnowski, Giulio Moreno, Zoran Stjepanović, Anđelko Šobot i Eduard Jahjaefendić. Nakon što je konstituiran Upravni odbor pristupilo se izboru predsjedavajućeg, kojeg biraju imenovani članovi Upravnog odbora između sebe. Gospodin Anđelko Šobot je izabran za predsjednika. Vlada Federacije BiH i Vijeće ministara BiH nisu još imenovali svoje predstavnike. Poslove sekretara Upravnog odbora obavljat će Vesko Drljača, sekretar FIPA-e.

POTPUNI NAZIV
PALACE GROUP d.o.o. za razvoj nekretnina Sarajevo
ADRESA
Zmaja od Bosne br. 4, 71000 Sarajevo
ODGOVORNO LICE
Sosnowski Tie Davis, direktor








Važnu ulogu u pronalasku partnera i uspješnom zaključenju ugovora imala je regionalna konsultantska kuća Ascendant Capital Advisors, specijalizovana za upravljanje projektima akvizicija i spajanja na tržištu Bosne i Hercegovine, Hrvatske i Srbije. Alexander Paine, direktor Ascendantovog ureda u Sarajevu, istakao je da Securitasova akvizicija AWG-a predstavlja prvo strano ulaganje u sektoru privatnih usluga zaštite ljudi i imovine te jedan od do sada najvećih i najznačajnijih ugovora te vrste u zemlji.
Nermina Voloder
The final chapter of BiH’s privatization story remains to be written, and its outcome may do much to determine whether as Tie Sosnowski, wrote in the FIC White Paper “mark the beginning of a new era in Bosnia and Herzegovina and that government officials will accelerate reforms in order to ensure that the business environment is predictable and transparent



January 15, 2010 Investigations into the nationalized Hypo Alpe Adria banking group (HAA) are likely to have significant legal and political implications in Austria and beyond - WikiLeaks Files

HYPO ALPE ADRIA GROUP'S FUTURE UNCLEAR AMID ALLEGATIONS OF WIDESPREAD FRAUD AND MISCONDUCT
2010 January 15, 14:49 (Friday)
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VIENNA 00000063 001.2 OF 003 Sensitive but unclassified -- protect accordingly. 1. (SBU) SUMMARY: Investigations into the nationalized Hypo Alpe Adria banking group (HAA) are likely to have significant legal and political implications in Austria and beyond. Following the December 14 GoA takeover of HAA (Austria's sixth largest banking group with pre-crisis assets of about EUR 43 billion), criminal investigations are underway and media revelations abound concerning insider profiteering, widespread leasing fraud, illegal party financing, poor risk management, and offshore speculative losses. The role of Austrian insider and later HAA CEO Tilo Berlin -- who helped prominent investors make a fast buck in the weeks leading to BayernLB's takeover in 2007 -- is under criminal investigation in Germany. The GoA downplays BayernLB's legal prospects of recovering funds from the 2007 takeover. Recent reports suggest the HAA faces significant problems in southeast Europe. Austria's Ministry of Finance/MoF will likely downsize HAA radically by selling some foreign divisions and closing others. END SUMMARY. 2. (SBU) This cable overviews the myriad allegations against HAA and the status of investigations in Austria (NOTE: we understand German prosecutors are hot on the case as well). Since the GoA nationalized HAA in December (to avert a potential run on the bank), media reports have described insider trading in the course of HAA's sale to BayernLB in 2007, leasing fraud, offshore losses, and a variety of issues in southeast Europe including poor risk management, and questionable political ties. Criminal Investigation Progressing Slowly? - - - - - - - - - - - - - - - - - - - - - - 3. (SBU) Criminal investigations in Austria began with the December 14 nationalization of HAA, but (unlike in Germany) appear to be proceeding slowly. Austrian business leaders including Claus Raidl (a steelmaker who also serves as President of Austria's central bank, the OeNB) and Hannes Androsch (co-head of FIMBAG, which leads the GoA's bank rescue effort) have criticized the slow handling of the case and called on the GoA to put more resources into the investigation. Apparently the case is being led by a single prosecutor in Klagenfurt (HAA's "home base"): both Raidl and Androsch called on the GoA to move the investigation out of Carinthia, given that state's close ties to HAA leadership. 4. (SBU) On January 14, an investigative committee in Carinthia's provincial parliament began looking into HAA's sale to BayernLB. Austria's coalition parties SPOe and OeVP have agreed to rely on that committee's findings and have no plans to establish a fact-finding committee in the federal Parliament. So far, none of the major players in HAA management, the Carinthian government, or the Carinthian Provincial Holding Company (which held HAA shares on behalf of the province) has resigned. FinMin Josef Proell is expected to announce personnel changes at HAA sometime after January 18. Leasing Fraud, Alleged Party Financing - - - - - - -- - - - - - - - - - - - - 5. (U) Austrian prosecutors are reportedly also investigating fraud in HAA leasing transactions. Media reports say hundreds of luxury yachts and cars "disappeared" from HAA's leasing business in the Balkans; reportedly, 100 leased cars were stolen even before HAA acquired them (i.e. their registration papers were forged prior to HAA acquiring them). HAA's loan business in the Balkans (see below) had similar gaps: country managers allegedly provided loans without evaluating risks or requiring appropriate collateral. Other press reports point out that HAA lost several hundred million Euros in Lehman, Iceland, and other toxic paper invested via offshore funds on Jersey Island (however, those losses were publicly known prior to HAA's takeover). 6. (U) A leading Austrian weekly has alleged that two political parties (the BZO and OVP) got large kickbacks from the 2007 sale to BayernLB, a charge that both parties flatly deny. Insider Trading On Behalf of Prominent Industrialists? - - - - - - - - - - - - - - - - - - - - - - - - - - - 7. (SBU) The role of prominent investors led by Austrian financier Tilo Berlin (reportedly a close associate of BayernLB CEO Werner Schmidt since the mid-1990s) is also under investigation for insider trading. Mr. Berlin led a group of prominent Austrians VIENNA 00000063 002.2 OF 003 industrialists -- reportedly including paper magnates Veit Sorger and Michael Groeller, furniture retailing CEO Herbert Koch, and representatives of the Flick, Tilly, and Senger-Weiss family fortunes -- who from December 2006 to March 2007 subscribed to an HAA equity increase, obtaining a 9.1% share in the bank. In March 2007, BayernLB CEO Schmidt was authorized to make a takeover offer for HAA; then-HAA CEO Wolfgang Kulterer was in contact with BayernLB regarding the takeover, but Kulterer was also on the board of a private trust belonging to one of Berlin's investors. Thus, Tilo Berlin may have had inside information on BayernLB's plans when he negotiated with HAA stakeholder GRAWE to raise his investors' stake to 25% plus one share. In April, BayernLB loaned Mr. Berlin EUR 300 million to buy a 16.5% stake in HAA from GRAWE (when BayernLB took over 50% plus one share in May 2007, it bought the Berlin group's 25% stake). Berlin's group ended up with a profit of EUR 150 million from a six-month investment, much of which was leveraged by BayernLB. In June 2007, Tilo Berlin was appointed CEO of HAA. Bavarian Attempts to Claw Back BayernLB Losses - - - - - - - - - - - - - - - - - - - - - - - 8. (SBU) BayernLB's engagement in HAA cost the bank (and now the state of Bavaria) at least EUR 4 billion, including the EUR 1.63 billion it paid for a 50% plus one share in May 2007 (NOTE: at the time, BayernLB valued HAA at EUR 3.3 billion, while many experts pegged HAA's worth at only EUR 1.8-2.5 billion). BayernLB and the Bavarian state government (its current majority owner) are considering legal action to recover money from HAA's former owners, claiming fraud. Absent a detailed legal analysis, BayernLB's chances are difficult to assess, but Austrians point to several factors weighing against damage claims: -- a 2006 OeNB report cited problems at HAA; -- the Austrian press frequently cited governance problems at HAA; -- Ernst & Young's due diligence report, although positive overall, was critical of HAA's problematic loan portfolio in Bosnia and Croatia and the unclear risks in its leasing portfolio; -- the 2007 purchase contract reportedly stipulated that BayernLB took over HAA with all risks. An Austrian MoF contact opined to us that Bavarian efforts to recover money (either from the state of Carinthia or the GoA) have no chance. Problems in Southeast Europe - - - - - - - - - - - - - - - 9. (U) Media reports suggest the bank has extensive problems in southeast Europe, on top of the leasing fraud detailed above. In Croatia, the bank is alleged to have cultivated high-level favor through loans to political figures including former defense official Vladimir Zagorec (later convicted of corruption) and Zagreb mayor Milan Bandic; Austrian media have also linked the Hypo group to scandal-ridden ex-prime minister Ivo Sanader. Hypo's business in Slovenia (with a balance sheet of EUR 2.3 billion in 2008, not including some leasing assets) is reportedly beset with similar issues. GoA Likely to Sell Foreign Subsidiaries - - - - - - - - - - - - - - - - - - - - 10. (SBU) Austria's MoF is working on a restructuring plan for Hypo Alpe Adria, with details to be announced sometime in March. MoF contacts say the government is still assessing HAA's situation, but is likely downsize HAA radically into a local Austrian bank by selling its (relatively) profitable businesses in Croatia, Slovenia and Northern Italy and by liquidating its operations in Bosnia-Herzegovina, Montenegro, and Serbia. HAA's leasing business will be wound down as quickly as practicable. COMMENT - - - - 11. (SBU) In retrospect, the rapid rise of Hypo Alpe Adria from a mid-sized Carinthian bank to a Balkan mini-empire appears rooted in highly risky business practices and aggressive pursuit of political favor. The case speaks to regulatory forbearance in Austria, where regulators reportedly knew of HAA's weaknesses but did not want to rock the boat. While the HAA scandal remains a central European story -- with few ties to the broader financial crisis -- the unraveling of Hypo Alpe Adria could tarnish a number of prominent economic and political figures in Austria and elsewhere. END COMMENT. 12. (U) This cable was coordinated with ConGen Munich/Embassy Berlin VIENNA 00000063 003.2 OF 003 and Embassy Zagreb. EACHO
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