From left: Petr Kellner (Czech, ranked 1); Bogoljub Karic (Serbia, 1), Mikhail Fridman (Russia, 1), Mamuka Khazaradze (Georgia, 2).
By bne IntelliNews May 11, 2017

Bogoljub Karic

(Serbia, 1)

One of Serbia’s richest and most controversial business people, Bogoljub Karic (63) has been rumoured to be making a political comeback after he was seen celebrating with Prime Minister Aleksandar Vucic after the latter’s victory in the April 2 presidential election.

Together with his three elder brothers (Zoran, Dragomir and Sreten) and sister Olivera, Bogoljub, 63, is owner of the conglomerate BK Group, which operates in Serbia, Russia and Belarus, and is mainly involved in construction.

BK Group was found in Serbia in the 1990s, when the country was under the control of dictator Slobodan Milosevic. It racked up a series of firsts, founding Serbia’s first mobile network Mobtel, first dial-up internet provider EUNET, one of the first private banks in Serbia, Karci banka (later Astra banka), private television station BK TV, and the first private university, BK University.

However, the “BK empire” soon fell victim to Karic’s bitter personal rivalry with former finance minister and central bank governor Mladjan Dinkic. In late 2001, Astra banka was put under central bank receivership over claims it had made secret payments to members of the Karic family.

Karic used his financial clout and his status as owner of a popular television station to fight back against Dinkic, before entering politics in 2004. He formed the Strength of Serbia Movement (PSS-BK) and was placed third in the 2004 presidential election. During his campaign, Karic stressed that he provided well-paid workplaces to thousands of people, and that unlike other candidates he was already rich and didn’t need a political position to make money.

He also promised to rebuild Serbian production, using a green salad as an example of a Serbian product; this captured the public imagination to the extent that green salads are now known to some as “Bogoljub’s salad” in Serbia.

Appearing at events with his wife, children and extended family, Karic successfully presented himself as a down-to-earth family man, becoming hugely popular among poorer, rural Serbs. Originally from the Kosovan town of Peja, he sometimes speaks Serbian ungrammatically. While they were still living in Kosovo, which became independent from Serbia in 2008, Karic and his brothers made money as wedding singers. Even today he often plays the guitar while his wife Milanka sings with him.

After the 2004 election, Dinkic and other government officials doubled down on Karic. Mobtel was stripped of its licence in 2005 over accusations it had helped a supporter of the Kosovo Liberation Army. Accusations of abuse of office and tax evasion were also levelled against Karic and his company, which was the subject of raids by armed police.

Karic left Serbia for Moscow in 2006, a move that was to last for a decade. During his absence, several indictments were made against him, although nothing has been proven in court.

Ten years later, when the statute of limitations against him had finally expired, Karic landed in Belgrade on December 30, 2016 as a free man with an estimated net wealth of $750mn. Numerous members of his family as well as ordinary citizens waited for him at the airport.

Karic’s return opened speculation he was planning to run for the presidency, but instead he actively supported Vucic’s campaign. He is now one of the possible candidates to succeed Vucic as prime minister, alongside several senior members of the ruling Serbian Progressive Party (SNS). PSS is now part of the SNS-led coalition.

In terms of his business activities, BK TV, which was closed in 2006, now operates as an internet channel but Karic has bought a licence for cable channel Nova TV and is now waiting for national coverage. He says he wants to build something positioned between Russia Today and the BBC. Karic is also promising to build Tesla grad, an affordable new settlement near Belgrade.


Ion Sturza

(Moldova, 4)


Ion Sturza, 56, has come a long way from the Moldovan village of Pirjolteni, 50km northwest of Chisinau, writes Clare Nuttall. Estimates of Sturza’s net worth vary, but he is now believed to be worth around $100mn.

After the collapse of communism, Sturza developed several businesses in Moldova during the 1990s, including Incon, an industrial group active in the food and beverages industry.

He also entered politics, founding the Alliance for Democracy and Reforms and gaining a seat in parliament in the 1998 election. He was swiftly appointed economy minister in Ion Ciubuc’s government, where he initiated a number of economic and social reforms, including fiscal and agrarian reform as well as major privatisations.

After Ciubuc’s unexpected resignation in February 1999, Sturza became prime minister. However, his term in office was short lived, as the government collapsed just 11 months later when several parties withdrew from the coalition in protest against plans to privatise some wine and tobacco companies.

Sturza then worked with Romania’s Rompetrol Group, and contributed to the $2.7bn sale of 75% of the company to KazMunaiGas in 2007. After the sale of Rompetrol, Sturza founded Fribourg Capital in Romania, which acts like a venture capital and private equity investor, with commitments in technology, agriculture, real estate and industrial production. Its portfolio includes Romanian e-commerce company elefant.ro and Liberty Technology Park in Romania’s second city Cluj.

Sturza enthused about the tech park in an interview with bne IntelliNews, saying the aim was to attract talent from around the world and thereby “create this density of talents which will help us create a new Google or Facebook”. 

He was also bullish about fintech, forecasting that banks will cease to exist in their current form within five to seven years. “Fintech is now a reality, not something in the imagination of the funny guys from IT. This is a utility mainly connecting people who have money with people who want the money,” he told bne IntelliNews on the sidelines of the Foreign Investors Summit 2016 in Bucharest.

“Today the technology is ready to provide this connection without any major interference from the physical banks. In five to seven years the banks will disappear as they are today.”

While his business activities have taken him mainly to Romania, Sturza, now 56, is still politically active within his native Moldova. Some 16 years after his brief stint as prime minister, he was again nominated for the position, this time by Moldova’s then President Nicolae Timofti. However, he failed to gain support from MPs, and Pavel Filip, a Democratic Party member close to oligarch Vlad Plahotnuic, was elected instead. 

At the time, Sturza openly accused Plahotniuc of using criminal files with information on Timofti’s family to blackmail the president, an allegation the oligarch denied. Corruption and state capture by oligarchs are the biggest problems facing Moldovans today, Sturza told bne IntelliNews the following year.

While much was made at the time of the 2016 presidential election’s role in determining whether Moldova would continue its path towards the EU or switch back towards Russia (it was won by pro-Russian candidate Igor Dodon), Sturza said this was a diversion from the real issues facing Moldovans.

“The biggest challenge for Moldova today is to fight corruption, oligarchs and to fight of course our poverty,” he said.  “Everybody tried to divert our discussions to geopolitical things but for normal people it doesn't matter if it's west or east, Europe or Russia. They want to live decent lives and not to be humiliated by oligarchs.” 


Dragos and Adrian Paval

(Romania, 2)

Dragos and Adrian Paval have built one of Romania's most dynamic and successful businesses, which in 2016 became the first company 100% controlled by local entrepreneurs to exceed €1bn in turnover, writes Carmen Simion in Bucharest.

Born into a large family from a small town in Romania’s rural northeast, the brothers chose to study maths in the regional centre Iasi. Their first business, a small shop with a floor area of just 16 square metres (sq m), was opened in 1992 in Bacau, where Dragos Paval had a job in a local plant. The brothers put up some wood and glass counters and started to sell all sorts of small items that they bought at lower prices in the capital Bucharest.

Dedeman became market leader only eight years after its first DIY store (with an area of 5,000 sq m) opened. While fierce competition and the economic crisis forced some of its competitors to leave Romania, Dedeman continued to use expansion as the main driver of its growth.

Dragos Paval told Profit.ro in 2016 that he is motivated by competition. “The fact that we are the best today doesn’t mean we will be tomorrow too. One has to continue working, to be vigilant all the time.”

This approach has helped turn Dedeman into one of the biggest retailers in Central and Eastern Europe, with a network of 45 stores employing more than 9,200 people, compared to only 11 employees in 1994 and 245 in 2002.

Its turnover has also increased significantly in recent years, from RON2bn (€442mn) in 2011 to more than RON5bn. Last year, Dedeman's turnover increased by more than 20% to RON5.25bn, a spokesperson the company told bne IntelliNews. This year, Dedeman estimates its turnover will go up by 7%.

The Paval brothers are two of the richest Romanians, being ranked second by Capital magazine in its Top 300 Richest Romanians in 2016, with an estimated fortune of €920mn- €950mn, which is €100mn higher than in the previous year. Despite this, they have avoided the media spotlight.

Although the Pavals did not benefit from support from bigger international investors or shareholders, Dedeman successfully survived the economic crisis when the construction market contracted. The Pavals took advantage of lower real estate prices to continue expanding their business during the crisis years. For example, in 2010 the retailer opened five new stores and five other new openings came the following year. Meanwhile, other DIY stores such as Baumax and OBI chose to leave the Romanian market.

Dedeman sells heating, plumbing, electrical, gas and construction products. 80% of its range of 45,000 products is produced domestically, with the remainder being imported from France, Italy, Spain, Poland, Slovakia and China, the company told bne IntelliNews.

The Paval brothers now want to tackle other fields; their plans include a real estate investment fund and a venture capital investment fund for Romanian companies, Dragos Paval told Profit.ro in January. There have already been rumours in the local media that the brothers are interested in acquiring the AFI Park office buildings project in Bucharest in a transaction estimated at around €154mn. However, Dedeman declined to make any comment on the matter to bne IntelliNews.


Samo and Iza Login

(Slovenia, 1)

Samo and Iza Login, who became Slovenia’s richest couple in 2016, think of popular virtual pet Talking Tom as their third child, writes Clare Nuttall.

Samo previously worked at najdi.si, the search engine that became Slovenia’s most visited website, and was a minority owner before the company was acquired by Telekom Slovenije. Even though Telekom's ownership meant a secure job for najdi.si workers, he decided to launch a new start-up.

Based on detailed analysis of the market, the virtual cat Talking Tom was born. Tom is the first app that repeats what its user says and but is not "robotic", Samo told Al Jazeera in a joint interview with his wife in 2016.

At the beginning of the Talking Tom story, Samo and his seven associates had been working on the idea and Iza joined later. Prior to join Samo's team, Iza worked for Microsoft, Novartis and IT and also had her own company. She told Al Jazeera that she had left what she believed was her "dream job" to join Samo and his team. She primarily took care of administrative and financial tasks and made sure everything was done “by the book".

While the couple are Slovenian, a few years ago they moved to Cyprus, looking for better opportunities for the company's development. They loved the island because of its nature, but they also wanted to benefit from the government’s support for start-ups. They say it is much easier to employ people from non-EU countries in a company registered in Cyprus than in Slovenia.

Other challenges of operating in their home market included difficulties issuing invoices to Apple and Google, as the first local company to invoice the two global tech giants.

Today, there are 15 applications within the Talking Tom and Friends umbrella brand, and 300mn active users monthly. The company maintains some of its operations in Slovenia, as well as in the UK and China.

In January, Chinese group Zhejiang Jinke Entertainment Culture Co reportedly acquired Outfit7 in a $1bn deal.

The $1bn price tag makes this the single biggest transaction ever for a Slovenian company or a company founded by Slovenians. The couple told Al Jazeera that despite their vision of joint success, they still couldn’t imagine their “third child” (they have two sons) would become “a billion dollar baby”.

These profiles are part of bne IntelliNews' special cover feature on the top business figures in Central and Eastern Europe, published in our May magazine, with cartoons by Vladimir Kremlev. Our correspondents ranked business leaders in each CEE/CIS country not just on wealth but on influence. The full magazine can be viewed here. The tables for Southeastern Europe can be viewed in the pdf below: