Serbian antitrust body publishes conclusions on temporary ban of PNM stake sale

By bne IntelliNews January 27, 2015

Serbia's antitrust commission has published its conclusions on launching a probe against Moscow-registered East Media Group and imposing a temporary ban on the sale or transfer of its 50% stake in local printing firm Politika Novine i Magazini (PNM).

The Commission for Protection of Competition said on January 23 that it had been unable to officially deliver its conclusions to East Media after adopting them in November. Instead, it is publishing the full texts on its website and will consider that the Moscow-based firm has received them 15 days after publication.

The stake was acquired in mid-2012 from Germany's WAZ but since then there have been suspicions that East Media is linked with Serbian privately-held concern Farmakom.

Also in November, the commission cancelled a similar probe launched against Farmakom in August, since the company entered bankruptcy procedures in September. Despite the new circumstances, however, the commission believes it is necessary to identify who the real owners of East Media are and why they did not seek its approval before completing the PNM takeover.

Acquisition background

WAZ Media Group's Eastern European arm, Vienna-based Ost Holding, sold its 50% stake in PNM to East Media Group for €4.7mn in 2012. At the time, the news about the ownership change in Serbia's oldest publishing house triggered fierce reactions from political parties and the media, which condemned the sale as rushed and non-transparent. 

EastMedia Group was registered in Russia only in January 2012 with a founding capital of €250. Its 100%-owner is Aleksandar Trbovic, while its director general is Uros Stefanovic. Both are believed to be linked to Farmakom's imprisoned owner Miroslav Bogicevic.

Antitrust probe background

In response to these reports, the antitrust commission said in Ausust 2014 that after extensive research it proved there is a link between Farmakom and EastMedia, namely that Farmakom took control over PNM via the Moscow-based firm. Under these circumstances, Farmakom would have been obliged to request approval from the commission before completing the acquisition. Since it did not do so, the commission decided to launch a procedure against it, seeking to establish whether Farmakom acted against the law.   

Prior to the deal, in April 2012, WAZ reportedly offered to sell its stake in PNM to its Serbian partner, state-owned Politika AD, asking for €4.7mn plus the execution of some other unspecified financial obligations. Politika AD, however, declined the offer.

PNM, which publishes the Politika daily, among other papers and magazines, was set up as a 50/50 joint venture by Serbian news publishing company Politika AD and WAZ in 2002.

WAZ started exiting the Serbian market in 2011, when it sold press distributor Stampa Sistem to local food company Centroproizvod. The exit was part of the German group's plans to pull out of Southeast Europe, as announced in August 2010.

Farmakom is active in agriculture, mining and metals manufacturing. It comprises seven companies and owns 15 mines.

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