On 26 April 2004, Serbia’s Privatization Agency (PA) sold 56% of Šinvoz’s remaining capital to one Nebojša Ivković from Belgrade. At that point in time there were 694 employees in the company. Besides paying the sale price, Ivković took on the added obligation of investing 17.9-million dinars into company assets in the 12-month period following the signing of the contract. Despite numerous warnings by worker-shareholders that Ivković was sabotaging the company – they presented five broken diesel-electric engines for the purposes of cutting into waste-iron as a senseless ‘investment’ by the new owner - the PA, nonetheless accepted an audit report that concluded that investments were being carried out in conformity with the contract.

During the inspections by state auditors of Ivković’s execution of his contractual obligations - conducted on 24 October 2005, 17 April 2006 and 20 March 2007 - the PA’s officials refused repeated requests by worker-shareholders to simply observe the recently purchased and useless engines lying in the Šinvoz yard. The workers also informed the PA about the possibility that the engines weren’t bought by Nebojša Ivković, but that they had come from an arrangement between Šinvoz and the Serbian Railroad Company before Ivković purchased his 56% share of Šinvoz. The PA did nothing to follow up on any of these allegations (even though in April 2008 these allegations were proven by the Anti-Corruption Council of the Government of Serbia).

By early 2007, Ivković had halted production in Šinvoz, blaming the workers’ protests for “sabotaging” the company’s development.  Although the workers warned the PA that the majority owner was deliberately driving the company into bankruptcy, the PA concluded that Ivković‘s management was performing well. In the summer of 2007, the workers launched public protests in front of Zrenjanin’s City Hall. There was no response from local authorities. Instead, Šinvoz union leader Mita Lisica and one more worker were fired from their jobs. Local courts reinstated them in September, only a few days before Šinvoz’s two major creditors – Belgrade-based TTC Logistic and Jugopapir - filed legal demands for debtor bankruptcy.

Interestingly, both these creditor companies are also owned by Nebojša Ivković.

It may seem weird that an owner would force his company into bankruptcy. However, there is a certain logic to such a strategy, for while the majority shareholder (Ivković) can control the company, he cannot control it absolutely as long as the workers are also co-owners. This is doubly true after worker-shareholder struggles like those at Jugoremedija increased the level of respect for property rights in Serbia.

Therefore, since 2007 bosses acquiring newly privatized firms throughout Serbia, started to employ the following simple tactic: they would appoint a management team with no worker-shareholder representatives and use the absence of control to make bad business deals through which the company would become indebted. Yet the trick is that the debts are incurred to shell companies owned by the same person. So, when the factories go bankrupt, the former majority owner, now the majority creditor, re-buys them - this time with 100% of the shares.

Besides the workers’ shares, the second target of this type of scam is the collective bargaining agreement between the union and the management – an agreement that the new owners (often) inherit from the socialist era. The agreement is annulled as well when the company goes into bankruptcy, all the workers are laid off and the union ceases to exist. When a former majority owner regains the factory after bankruptcy, he/she can then choose whom to re-employ. Any union that is reinstated under such conditions will be under the full control of the boss and his/her new management.

On 28 December 2007, Šinvoz’s worker-shareholders occupied their factory, demanding from the government a termination of the contract and an investigation into Šinvoz’s debts (incurred as we have already seen to TTC Logistic, Jugopapir and a few other firms owned by Ivković). A few days prior to the occupation, Jugoremedija, Šinvoz, BEK and workers at a number of other Zrenjanin factories, formed the local political movement ‘Pokret RAVNOPRAVNOST’ (i.e. the EQUALITY Movement).

On 15 January 2008, around 1,000 worker-shareholders from Šinvoz and BEK led a protest down to Belgrade's Union Hall, demanding the termination of the Šinvoz privatization deal and an agreement with the government about how both companies can get out of bankruptcy. During the night, between January 15th and 16th, 40 year-old Šinvoz worker Radislav Stojanov died of a heart attack during a sit-in protest.

After the Belgrade media reported that a worker had died during the protest, Serbia’s Minister of Economy Mlađan Dinkić called a special meeting with the workers’ representatives. At the press conference that followed the meeting, the Minister publically stated that: “It is obvious that the majority owner deliberately placed Šinvoz into bankruptcy.” Dinkić also announced that his Ministry would investigate how the PA had regulated Ivković’s fulfillment of the privatization contract, and that he was going to initiate a police investigation into the way Šinvoz went bankrupt. “It doesn’t take long to establish all those facts,” the Minister said, “and we will try to act as fast as possible, because Serbia needs such production and those products can be exported too!”

On 31 January 2008, the PA terminated its contract with Ivković on the basis of the same arguments they had been ignoring since 2005 – i.e. that Ivković worked to forge and sabotage the investment.

Since March 2008, the EQUALITY Movement and the Zrenjanin branch of the Autonomous Unions of Serbia have been organizing a Solidarity Fund for the Šinvoz workers, to help them to survive during this struggle. The Šinvoz workers haven’t received any payment since Ivković halted production in February 2007.

During the remainder of 2008, the PA has failed to launch any proceedings against Ivković for fraud and deliberate bankruptcy. The PA thus refuses to exercise its jurisdiction over such matters or, in according with Article 41d from the Law on Privatization, to appoint a representative of public capital for Šinvoz following the termination of the contract with Ivković.

This last provision is imperative, as the PA is obliged to appoint the representative of public capital the very same day of the contract’s termination, no matter what the status of the company (bankrupt, or not). If the representative had been appointed as the owner of 30% of Šinvoz’s capital, he/she would have been able, according to Article 129 of the Law on Bankruptcy Proceedings, to submit the reorganization plan.  This was the least that the state could do for a company that went into bankruptcy because of the irresponsible and illegal acts of the PA in the first place. Yet, the PA did nothing to press the fraud charges against Ivković, so on 14 July 2008 he submitted his own reorganization plan for Šinvoz.

Ivković’s plan for the reorganization of the company that he in fact destroyed would provide only 50 jobs by 2010, and a 100 more by 2012!

The assembly of creditors, that was convened to make the decision on Ivković’s reorganization plan, was scheduled for 24 September 2008 at the Zrenjanin Economic Court. As legal majority creditor Ivković was in a position to adopt his reorganization plan by himself. About 100 workers came to the Economic Court as small creditors, and started applauding and chanting when the judge entered the courtroom. The assembly couldn’t be held because of the noise, so the session was postponed for October 1. The workers submitted an initiative before the court to delay the hearing on the reorganization plan and suspend the bankruptcy proceedings until the parallel criminal proceedings concerning Ivković’s deliberate forcing of a bankruptcy on Šinvoz were completed.

On September 31, the governments’ Anti-Corruption Council released its report on Šinvoz, stating that it was a drastic example of law breaking in the privatization process. The report further blamed the states' Privatization Agency for possible corruption given its drastically poor regulation of Ivković’s fulfillment of contractual obligations. The Council advised the Government to plead with the Economic Court to halt the bankruptcy proceedings until the Prosecutors' Office completes its investigation of Ivković’s management for deliberate bankruptcy.

On October 1, the judge refused to answer the workers requests, so they started again by applauding and chanting: “The Factory is ours!”; “Arrest the thieves!”; “The Court is for the People!” and so-on. After about half-an-hour, the police kicked the workers out of the courtroom, and the restructuring plan was adopted without the workers being present. The workers then appealed to the Higher Economic Court in Belgrade.

In the meantime, on 11 May 2008, local elections were held across Serbia. The EQUALITY Movement took 4 seats in Zrenjanin’s local council. On November 24, EQUALITY’s councilors initiated a City of Zrenjanin Inquiry Board on Šinvoz, which would investigate the circumstances surrounding Šinvoz’s bankruptcy. All the local political parties voted for proposal, which is quite a unique case in Serbia, deeply divided among nationalistic and pro-European parties, which often can't find common ground on any issue. More importantly, this was the first commission ever established in Serbia by elected representatives, at either the local or the national level, to investigate a privatization case.

On 2 February 2009, the Higher Economic Court in Belgrade upheld the verdict reached by the Zrenjanin Economic Court on 1 October 2008 allowing Nebojša Ivković to implement his Reorganization Program for Šinvoz. This means that the man who intentionally put Šinvoz into bankruptcy, deceived the other shareholders (the workers and pensioners of Šinvoz), and broke his contract with state, is now being given total control over the factory. It’s not enough that he managed to avoid jail, but he is now actually being rewarded by the courts for perpetuating this scam.

At a meeting held a few days later on 6 February 2009, over 300 Šinvoz workers voted to continue the struggle. At the same meeting, intellectuals and activists who are standing in solidarity with the Šinvoz workers formed a Citizens’ Board in Support of Šinvoz Workers. Among those on the Citizens’ Board are known intellectuals from Serbia’s summer of ’68, including Dr. Zagorka Golubović and Dr. Nebojša Popov, as well as Freedom Fight activist Ivan Zlatić and others.

On 21 February 2009, attendees at the Congress on Economic Solidarity in Vienna (Austria) signed a letter of support for these Šinvoz workers. Five days later, EQUALITY Movement councilor and the Chairman of the Board, Branislav Markuš, read the letter in front of Zrenjanin’s City Parliament, to encourage the other MPs to support the conclusions of the Inquiry Board.

http://www.solidarische-oekonomie.at/index.php?option=com_content&view=article&id=84

Famous Serbian leftist filmmaker Želimir Žilnik, together with his young colleague Dragan Gmizić, made a documentary „The Case of Bankruptcy“, about the struggle of the Šinvoz workers. The film premiered on February 24 in Zrenjanin.

On February 26, Zrenjanin’s city council adopted the conclusions and recommendations of the Board of Inquiry with respect to Šinvoz. The Board concluded that the fraud committed was obvious, and that the Court should use its right under Article 102 and 103 of the Law on Bankruptcy to nullify all the company's contracts made in the 5 years prior to the bankruptcy.

ALL MEMBERS OF ZRENJANIN CITY COUNCIL VOTED FOR THE REPORT OF THE BOARD. AT THE SAME SESSION, THE COUNCIL ELECTED A NEW WORKING GROUP THAT WILL WORK ON THE IMPLEMENTATION OF THE INQUIRY BOARDS’ RECOMENDATIONS!

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In order to support the Šinvoz workers’ struggle, please sign the attached letter and send it to the following 5 addresses:

 

jzivanovic@predsednik.rs, predsednikvladesrbije@gov.rs, muprs@mup.gov.rs, pismo@freedomfight.net, info@pokret.net

 

* Boris Tadić, President of the Republic of Serbia, kontakt.
* Mirko Cvetković, Prime minister of the Government of Serbia,
* Ivica Dačić, Minister of Interior


Dear Sir / Madam:

I am writing to you in regards to information I received regarding the privatization and bankruptcy of Zrenjanin's factory Šinvoz, and the destiny of over 600 worker-shareholders who were employed in the company before the bankruptcy. 

Since December 2007 Šinvoz workers have been protesting because they lost their property and their jobs after: (1) the majority owner Nebojša Ivković deliberately placed the company in a state of bankruptcy, but also (2) because the Privatization Agency behaved in a drastically irresponsible and illegal way. These facts have been established by the Anti-Corruption Council of the Government of Serbia, and by the  Inquiry Board into Šinvoz established by Zrenjanin’s City Council. Still, the Prosecutors’ Office and the Economic Court are ignoring these findings, while the Privatization Agency and the Ministry of Economy are denying the facts by taking no actions whatsoever to repair the consequences of their misconduct.

I am asking you and your institution to do everything in your power to protect the worker-shareholders of Šinvoz's rights to work and to private property, to prevent the robbery of this factory and the destitution of over 600 families in a city already devastated by the economic transition.  

Seeing that your government strives to establish democracy in Serbia I am sure that you realize that the protection of the fundamental rights of worker-shareholders is central to the success of democratic reforms. A country that only respects the interests of the rich and not the rights of other citizens cannot become a free country but only a land of slaves.

Yours truly,