{"id":52175,"date":"2021-05-25T11:16:26","date_gmt":"2021-05-25T09:16:26","guid":{"rendered":"https:\/\/www.krik.rs\/?p=52175"},"modified":"2024-04-15T11:18:40","modified_gmt":"2024-04-15T09:18:40","slug":"lukashenko-doles-out-prime-belarus-real-estate-to-serbian-cronies","status":"publish","type":"post","link":"https:\/\/www.krik.rs\/en\/lukashenko-doles-out-prime-belarus-real-estate-to-serbian-cronies\/","title":{"rendered":"Lukashenko Doles Out Prime Belarus Real Estate to Serbian Cronies"},"content":{"rendered":"\n

Belarus has given away about $1 billion worth of land to construction companies owned by Serbia’s well-connected Kari\u0107 family.<\/strong><\/p>\n\n\n\n

Authors: Stas Ivashkevich (Belarusian Investigative Center), Olga Ratmirova (Belarusian Investigative Center), Ales Yarashevich (Belarusian Investigative Center), and Bojana Jovanovic (KRIK)<\/em><\/strong><\/p>\n\n\n\n

When the Minsk City Council announced the winner of an architectural competition in 2008, the plan for the futuristic project was ambitious. Glass towers twisted like corkscrews, enveloping a 300-meter-high skyscraper, while Venice-style gondolas cruised a canal between residential blocks.<\/p>\n\n\n\n

Christened the Minsk Lighthouse, the winning design promised administrative and cultural buildings, as well as a \u201cgreen zone\u201d and Europe\u2019s largest water park. But all there is to show for the visionary project today are high-rise cinderblock apartment buildings that blend in with much of the Belarusian capital.<\/p>\n\n\n\n

The winner of the competition, Zomex Investment, was owned by a family of Serbian businessmen with close ties to Belarus\u2019 strongman president, Alexander Lukashenko. Zomex received huge tax breaks and state resources to support the construction, and was granted free land in the center of the city\u00a0through a presidential decree<\/a>.<\/p>\n\n\n

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Bogoljub Kari\u0107<\/em> Credit: Facebook<\/figcaption><\/figure>\n<\/div>\n\n\n

Multiple projects by Zomex and two affiliated companies \u2014 Dana Astra and Belinte Robe \u2014 have followed the same pattern: big promises and generous government support for ambitious plans that never materialize. Despite the companies\u2019 repeated failures to deliver on commissioned projects, they keep getting contracts.<\/p>\n\n\n\n

When reporters analyzed land registry records, they found that Zomex (which recently changed its name to Emirates Blue Sky), Dana Astra, and Belinte Robes currently have at least 11 construction projects around Minsk. The three companies are the largest developers in the city, and have together been given over 400 hectares of land, valued at about US$1 billion.<\/p>\n\n\n\n

Reporters also discovered that the owner of those companies performed a secretive corporate maneuver that allowed him to continue profiting from sweetheart deals with Lukashenko\u2019s administration, while dodging sanctions imposed by the European Union.<\/p>\n\n\n\n

Until late last year, all three firms were owned by Dana Holdings. That company is registered in Cyprus and until recently was owned by Nebojsa Kari\u0107, a member of a wealthy and influential Serbian family that has extensive business interests in Belarus.<\/p>\n\n\n\n

In December 2020, the European Union blacklisted Dana Holdings for \u201cbenefitting from and supporting<\/a>\u201d the Lukashenko regime, which has drawn international ire for brutal crackdowns on peaceful protesters rejecting a rigged vote and demanding fair elections.<\/p>\n\n\n\n

The Kari\u0107 family may have anticipated the EU\u2019s move. Just days before the sanctions were announced, Dana Holdings was removed as the owner of the three property development firms and replaced by a company registered in the United Arab Emirates called Enterprise Developments Holding Limited.<\/p>\n\n\n\n

The director and owner of Enterprise Developments is Mostafa el-Tobgy, according to company registration documents obtained by reporters. In 2013, a Dana Holdings advertisement<\/a> on the popular Belarussan news site TUT.by identified a man named Mustafa Al Tobgy as an executive director of Dana Holdings.<\/p>\n\n\n\n

Technically no longer owned by Dana Holdings, the Kari\u0107 companies are now able to skirt EU sanctions and continue to cash in on their connections to Lukashenko.<\/p>\n\n\n\n

Asked about this change in ownership, Vibor Muli\u0107, chairman of the board of Dana Holdings, replied: \u201cAll the decisions prior to the sanctions such as changes in ownership were purely for business reasons and were made much earlier.\u201d<\/p>\n\n\n\n

He declined to comment on the sanctions levied on Dana Holdings, noting that the company was in the midst of a legal appeal against the decision.<\/p>\n\n\n\n

He denied the Kari\u0107s had a privileged relationship with Lukashenko.<\/p>\n\n\n\n

\u201cThere is only a relationship between Dana Astra and the National Olympic Committee,\u201d Mulic said, referring to the firm\u2019s sponsorship of Belarus\u2019 Olympic committee, whose vice president is Lukashenko\u2019s son.<\/p>\n\n\n\n

From Communism to Kleptocracy<\/strong><\/p>\n\n\n\n

For over a decade Belarus has been encouraged by international institutions like the World Bank to move away from the state-run economy enshrined during Soviet times. But instead of a market economy, what has emerged is a system of crony capitalism that benefits well-connected private firms. Top public officials, or their proxies, are granted privileged access to entire industries, and move wealth out of the country using offshore companies.<\/p>\n\n\n\n

Construction has become one of the most lucrative businesses in Belarus. In 2011, more than half of residential real estate projects in Minsk were still controlled by state-owned corporations. By 2020 private companies were building 90 percent of new projects in the Belarusian capital, according to Minsk-based real estate expert Natalya Litovskaya.<\/p>\n\n\n\n

Most of the benefits of this boom have accrued to just three companies: Zomex Investment, Dana Astra, and Belinte Robe. Their owners, the Kari\u0107 brothers, have reaped the rewards of their relationship with Lukashenko, who has ruled Belarus since 1994, and is no longer recognized by the EU as the country\u2019s legitimate president.<\/p>\n\n\n\n

Members of Serbia\u2019s Kari\u0107 family forged ties with Lukashenko after political rivals in their home country began investigating their businesses in the mid-2000s. Prosecutors accused the Kari\u0107s of unfairly profiting from their privileged position under the regime of Slobodan Milo\u0161evi\u0107, but later dropped charges against them.<\/p>\n\n\n\n

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Dragomir Kari\u0107, Belarusian President Alexander Lukashenko, and Serbian President Tomislav Nikoli\u0107 in Minsk in 2015. Credit:\u00a0Government of Belarus<\/a><\/figcaption><\/figure>\n\n\n\n

In 2009, Nebojsa\u2019s uncle, Dragomir Kari\u0107, invited Lukashenko to an economic forum at the Serbian mountain resort of Kapaonik<\/a>. A year later, Dragomir was appointed to lead the construction of a large development in the Belarusian capital called Minsk City. The project was later taken over by Kari\u0107\u2019s company, Dana Astra.<\/p>\n\n\n\n

The president\u2019s daughter-in-law, Lilia Lukashenko, was listed in company documents in 2017 as one of the deputy directors of Dana Astra, though a spokesman for the Kari\u0107s said she no longer works there. (She did not respond to a request for comment.) Dana Astra has also enjoyed free advertising in state media, including television news programs that highlighted apartment sales.<\/p>\n\n\n\n

The political connections the Kari\u0107s enjoy in Belarus have been hugely lucrative.<\/p>\n\n\n\n

Zomex\u2019s net profit for 2019 was more than $35 million, with a profit margin of 61 percent, much higher than the industry average. Earnings for 2020 show an even higher profit margin of 67.5 percent, and about $22 million earned. According to its arrangement with the government, Zomex pays no taxes on its earnings.<\/p>\n\n\n\n

Despite all the advantages it enjoys as one of the regime\u2019s favorite developers \u2013\u2013 or maybe because of them \u2013\u2013 Zomex has consistently failed to deliver on its proposals. The Minsk Lighthouse competition was no exception.<\/p>\n\n\n\n\n\t\t\t\t

<\/p>\n\t\t\t\t\n\t\t\t\t\t<\/sr7-adjuster>\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t