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December 11, 1995
. Vreme News Digest Agency No 219
The Case of the Bel Pagette

The Silence of the Beepers

by Dejan Anastasijevic

The typical Serbian businessman, people say, has to have three things: a stainless steel pistol, black BMW and a pager on his belt. In the five years that Serbia has had a paging system, the noisy little boxes providing access to owners by anyone no matter where the carrier is, have become a status symbol. In a country where telephone lines are constantly busy the system is a necessary safety net which stops many businesses from collapsing.

Just prior to the November state holiday, Serbia's pagers stopped beeping; some owners got angry but few were surprised since the public knew for weeks that a fierce battle was underway for ownership of the Bel Pagette telecommunications company which controls the system. That battle was being waged between owner Zoran Markovic, the Karic Brothers corporation and others close to the Yugoslav United Left (JUL). The outcome of the battle will decide not just who the money from the pagers will go to but also the further development of telecommunications in FR Yugoslavia.

Everything began with a registration demand to the Belgrade economic court early in November for the new statute of Bel Pagette and new director Veljko Vukota. Under that demand, Vukota was also to have been registered as chairman of the two member management board with 70% of management rights leaving Zoran Markovic with 30%. The demand was filed on behalf of the Ontario based Bel Pagette Corporation (controlled by 12 Canadian citizens). Judge Lidija Markovic seems not to have fully understood the demand and she had the case taken away from her: the demand was withdrawn and turned over to another judge, Goran Kljajevic who accepted it on November 17. The company's bank accounts were blocked (some 30,000 dinars disappeared from them) and its seals were changed.

The next day, Vecernje Novosti and Politika dailies featured articles which explained the changes with the dissatisfaction of the Canadians with Zoran Markovic and his failure to meet financial obligations towards the Canadian investors. Markovic responded fiercely claiming the Canadian corporation had no right to oust him since investors are not the same as founders. He said the Canadians promised five years ago that they would invest over a million dollars into Belgrade's Bel Pagette. Instead, he added, they invested exactly 243,596 dollars up to the moment the sanctions came into place and nothing since. Markovic showed documents to prove that he broke off the contract with the Canadians and repaid their investment with large dividends. At the same time he accused the Karic Brothers of backing the Canadians with their financial and political influence and said they planned to grab away his system, create a pager and cellular phone monopoly which both companies have been working on for months.

The Karic corporation decisively denied those claims and saying they aren't interested in Bel Pagette but their credibility is lowered by the fact that Vukota appointed Karic Bank vice-president Zoran Vasic to be his deputy. In the meantime, Markovic demanded the exemption of the economic court (refused), appealed to a higher court and submitted an arbitration request. The Canadians jumped in as well and they announced criminal charges against Markovic through the daily press for "fraud, tax evasions, unpaid profits and damages". Both Markovic and the Canadians backed up their claims with full page newspaper ads primarily in Politika. The fact is that Markovic is the only one who has allowed public access to documents (contracts, court rulings) in his favor.

In all the time, the new director, Vukota, had a number of technical problems: Bel Pagette security refused to allow him into the building for days and employees who mainly backed Markovic sent occasional appeals for help to pager users. Vukota took over five days later with the help of the police and a court warrant. He got an office without a phone and the pagers stopped operating. Bel Pagette said it was due to a technical fault but Vukota said Markovic had sabotaged the system. the system went back to work after the November holidays once Vukota stopped coming into the building. Both sides are now waiting for a final ruling by the higher economic court which is due on December 9. Since that court is the final instance, the ownership over the paging system will be decided once and for all.

That ruling will also decide the future of mobile phones in FR Yugoslavia. Markovic says the system he wants to develop will be more modern than the Karic system and that his phones will cost just 500 DEM while BK Telekom plans to charge seven times as much. And there's another catch: mobile phone suppliers insist on at least two competing companies existing in the country. That means BK Telekom will have to have a competitor even if it takes over Bel Pagette. Reliable sources said the Karic Brothers have already found a rival in the form of the Serbian state radio and TV.

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