The Doomed Third Passport

“I am only the President of France and cannot influence the court. I advise you to provide your friend with a lawyer.” This is how, according to an article published by the Glas Javnosti daily, Jacques Chirac answered Slobodan Milosevic’s plea to do something  and help release Miodrag Zecevic from jail. Miodrag Zecevic, the director of the Yugoslav Bank for International Economic Cooperation, was arrested on Tuesday, August 11, in Paris and three days later an indictment was raised against him in the Commercial Court in Paris. He is being charged by the French-Yugoslav Bank (FJB), whose director he was until May 29, 1997, for the abuse of official position and embezzlement. Zecevic, who has dual French-Yugoslav Citizenship, left France in July last year, following a physical attack aimed at the receiver of the bank, a Frenchman, who was appointed on that same May 29 by the Central Bank of France. Zecevic simply refused to accept the decision of the National Bank of France by which he was prohibited from even entering the building of his former bank. The French monetary authorities froze all accounts of the French-Yugoslav bank in April last year. When Zecevic tried to disregard that prohibition, the receiver opposed him. He agreed to return to Yugoslavia only after this incident, even though his Yugoslav buddies demanded that of him from the moment when the French blocked the bank’s activities. Zecevic left France, despite the French Minister of Justice’s written prohibition.

No one knows why Miodrag Zecevic returned to France (word has it that he returned in order to pick up some things from his flat in Paris or to withdraw some government funds from a secret account), but everyone knows how. He used a diplomatic passport of the Federal Republic of Yugoslavia for that purpose. Zecevic was never in the diplomatic corps, he was also obviously unaware of the fact that a diplomatic passport provides immunity only in the case of arriving on a diplomatic mission. Beside which, for French authorities, he is a French citizen, so it would have been of no help to him had he arrived on diplomatic business.

As soon as news of Zecevic’s arrest arrived here, a rescue mission was immediately set up. First Milosevic himself asked the French to release his best friend and former deputy in Beobanka. That didn’t work. Then, on August 20, a petitioning mission landed in Paris headed by Dusan Vlatkovic, the president of the National Bank of Yugoslavia, Borka Vucic, president of Beogradske Bank AD and Zlatan Perucic, the current president of Beobanka. Immediately following the arrest, and in the midst of the enrollment of a new generation of students, Miodrag’s brother Milija, the dean of the School of International Management, arrived in Paris.

The French-Yugoslav bank was founded in 1978. It’s stockholders were two French banks, Societe Generale and Parisba, two Serbian ones, Jugobanka and Beobanka, and the Privredna Bank from Sarajevo and Privredna Bank from Zagreb. The French banks held 50 percent of the capital, and the banks from the Socialist Federal Republic of Yugoslavia the remaining 50 percent. This financial institution was never devised as a normal bank, but rather as a financial service for the Yugoslav companies which had business dealings in France. It’s credits were always way too expensive, so that French companies never had any dealings with it. Zecevic, who was towards the end of the seventies one of the vice-presidents of the National Bank of Yugoslavia, and starting from the eighties, the deputy general manager of Beobanka, arrives as the head of this Paris bank in 1986. He immediately demonstrated his business style which shall bring about this current scandal. He was especially pleased to withdraw foreign currency deposits from the National Bank of Yugoslavia, with extremely low interest rates, only in order to issue those very same funds as credit to the Yugoslav banks and economy, with greatly higher rates.

It seems as though in the course of the first years of his residence in Paris, Miodrag Zecevic indebted the French republic with some extraordinary feat, which awarded him in 1989, on the occasion of the two hundredth anniversary of the Revolution, with a decoration of the Legion of Honor, admittedly following up on a suggestion of the then current honorary president of FJB Francois Beckson, who had received a high Yugoslav decoration immediately prior to this. Zecevic celebrated his Legion of Honor in the exclusive Automobile Club at the Place de la Concorde, and on that occasion squandered 60.000 francs of the bank’s money. Zecevic subsequently received French citizenship as well, and when the Serbian telephone network was to be modernized in 1995, he strongly lobbied that all equipment be bought from the French Alcatel company, whose rival for that deal was the German Siemens company, and was naturally successful.

The interest of the French monetary authorities for the specific way in which Zecevic conducted his business dealings appeared on the scene in 1990 when the controller of the Central Bank of France, to his utter amazement, found that huge sums were issued by the bank without any explanations as to where the funds went to and on what basis. Since Zecevic had VIP treatment, he soon became invincible in his eyes. Towards the end of the hyperinflation year of 1993, he conducted an “ownership transformation” of the bank. By then the ownership structure had, by subsequent capital acquisitions of both sides, already been changed. Yugoslav banks then held 54 percent of the stocks, the French Societe Generale and Periba jointly held 18 percent, while 28 percent of the stocks belonged to the Privredna Bank in Sarajevo and the Privredna Bank in Zagreb. The share of the stockholders from the Federal Republic of Yugoslavia grew to around 75 percent, while the stockholders from the former Yugoslav republics were simply omitted. Which is why the banks from Sarajevo and Zagreb filed charges against the FRY. The French court in 1997 annulled the decision of Zecevic’s assembly and ordered the National Bank of France to freeze the bank’s accounts and to replace the bank’s management team. Borka Vucic and Zlatan Perucic flew to Paris then as well to intervene with the French government. Not only did Zecevic not observe this decision, but he organized another stockholders’ assembly illegally which appointed him bank president.
The French authorities could pick and choose the reasons for Zecevic’s arrest. The auditing house refused to verify the bank’s annual balance sheet for 1996, due to loan shark interest rates and enormous and non justified expenditure. FJB was, according to the French press which dealt with this issue to a large extent in the first half of 1997, blocked due to charges lodged by Slovenia, Croatia and Macedonia. Namely, Zecevic tried to withdraw funds from the accounts in the French banks in which the non-divided funds of the former SFRY were held. The attention of the French controllers was also drawn by irregular conditions by which FJB granted two credits to the Amelija firm from Cyprus whose owner is Dr. Nenad Djordjevic.

A few months after he returned to Yugoslavia, Miodrag Zecevic is heading the Yugoslav Bank for International Economic Cooperation (JUBMES). Having taken up his new appointment, he announced that the bank will deal with financing exports (even though the injured stockholders announced a request for an international arbitration, which would  thenceforth disable JUBMES of dealing with foreign countries) and with the purchase of the Yugoslav debt abroad. Meddling with the undivided foreign debt of the former SFRY in the amount of 700 million dollars, for which all former Yugoslav republics are responsible, in the percentage ascertained by the International Monetary Fund, was Zecevic’s favorite pastime in Paris as well. That debt shall be paid back primarily by those republics who have the necessary funds, meaning Slovenia. The other republics don’t have the necessary funds to pay back their debts to foreign countries, however certain companies and individuals have the required funds to purchase large sums of the debt which is now being sold below price from the original creditors. The Karic brothers have purchased 30 million dollars of the debt, FJB around ten million dollars. Around 370 million dollars of the debt belong to three companies which no one has ever heard of and whose owners are unknown. All were waiting for the Slovenians, who can’t wait to get rid of this misery, to start paying off their debt. However, even they aren’t as naive as that. They proclaimed their readiness to pay off a larger part of the debt than the amount ascertained by the IMF last year, however under the condition that the part of the debt which is in the hands of individuals or companies which have any connections to FRY be annulled.

Miodrag Zecevic, as JUMBES’s director, visited Kiev in May, at the annual assembly of the European Bank for Renewal and Development. French capital dominates this bank. On that occasion, as he himself said, he spoke to a number of European businessmen, including French ones. No one seemed to mind his presence. Maybe that made him bold enough to attempt a “return home”. Maybe he relied on the official explanation at the time of his admittance to the Legion of Honor, having taken a diplomatic passport with him. “This is a man who unites expertise and warmth, and who attains many strong business contacts with French businessmen, demonstrating amazing diplomatic skill”, states the explanation.