How FINA and Court in Šibenik Erased a Company and Destroyed a 10 Million Kuna Business

Total Croatia News

Croatian bureaucracy at its finest.

The state has erased my company from the business register and destroyed my ten million kuna investment, says Kristijan Begić, who returned to his parents’ home country from Berlin, Germany, wanting to do business in Croatia. He was born in Germany’s capital city, went to school there and became an engineer at a renowned university. Driven by his love for his profession and for Croatia, he made his decision despite the warnings from others. Still, no one could have imagined what was to happen next, reports Slobodna Dalmacija on March 28, 2016.

Kristijan decided to open a plant for production of Harley-Davidson motorcycle parts. “That is my line of work, I have good contacts with them. I have imported used motorcycles from the US and successfully created motorcycle parts to customer’s order. So, I thought, I have both contacts and knowledge, I will start a business, employ four people for now, and, later on, ten or even more workers”, Kristijan says.

But, the story gets complicated. Christian and his wife Zorana bought a land lot from the City of Šibenik, or rather from its Podi company, to build the facility on it. The lot was located within the zone that has gotten a great media attention as a very attractive area for investors. “We paid 18,000 euros for 3,600 square metres, signed the purchasing agreement, notarized it, and committed to start the construction work within five years to build the facility which will include at least four employees. Right after we paid for it – a shock! We received the refusal letter from the Land Registry Department of the Municipal Court in Šibenik?! We could not believe it!”, Kristijan says.

“You buy the land from the city, sign the agreement, pay the notary, pay for everything right away, and the state does not let you register the land and does not give you the reason in the refusal letter”, Kristijan adds, showing the letter that is very unclear. But, he wasn’t discouraged. They soon figured out that this happened because the City of Šibenik did not parcel the land that was put up for sale.

“Our lot needed to be separated from the other lots; we had to wait for HEP (Croatian Electric Company) to construct a substation and register; the Waterworks and Sewerage needed to do their part of the job and register as well, and then the rest of us would be able to register. I thought, if this is the only problem, I will wait. According to the agreement, I had five years to launch the project and everything will be ready by then. I even paid 13,000 kuna for parcelling from my own pocket while waiting for registration, although this was not something that I should have done, but the entity which sold the land”, Kristijan explains.

The time passed by and Begić d.o.o. could not start building because they could not register the land. However, three and a half years after they signed the purchasing agreement it seemed that things have moved again in the right direction. They signed the agreement annex with Podi company and finally registered as the owners of the land. Everything was ready for the 10 million kuna investment.

Kristijan and Zorana, encouraged by the fact that the City of Šibenik did not deceive them after they invested their hard earned 18,000 euros, have almost brought construction equipment to the lot and started construction. But, after one phone call from their accountant, their entire world collapsed. “We were conducting our business activities through the Begić company, paying salaries and taxes, because, despite the fact that the construction of the factory had not yet started, our family apartment business in Duće was operating through this company. In the ninth month of last year, when we were supposed to pay the salaries, we got the call from our accountant. He said that the company has been erased, the company identification number has been erased and does not exist anymore, and we cannot do business with it. I don’t even know where to start to explain the shock! Erased, why?!”, Kristijan says.

Kristijan’s voice starts shaking when he describes this nightmare. His wife and he called FINA and the Commercial Court in Šibenik and they alarmed the lawyer to appeal the decision related to the removal of the company from the court register. “They erased us together with inactive companies who did not submit annual financial reports. So, these were companies that existed on paper only. We told FINA: ‘but we did submit the financial report and we paid taxes based on that report, for God’s sake'”, Zorana says in a nervous tone while recalling the conversations with the FINA and Commercial Court representatives.

The battle continues, the vicious circle ensues, but the pair remained certain that someone would realize a mistake has been made. FINA confirmed that the report existed, but their appeal to the High Commercial Court in Zagreb has been refused due to a missed deadline. They appealed when they were informed by the accountant that salaries cannot be paid because the company has been removed from the register, and not within eight days from the day the decision was put up on the bulletin board and the website of the Commercial Court in Šibenik.

The president of the Šibenik court told them that this was not his problem and that the decision was made on the basis of FINA’s order while FINA’s lawyer said that what happened to them is not within his competence.

The story has now reached a grotesque point. The Begić company from Šibenik, the company which owned the lot in Podi zone, does not exist anymore. Begić, a physical person and the only owner of the now non-existing company, cannot simply “jump into” the agreement with Podi whose owner is the City of Šibenik, despite the fact that he loaned the money to the erased business entity to pay for the lot. “No one has a solution. They have even suggested to me to sue myself – I, the physical person, suing the company that does not exist anymore and owes me 18,000 euros for the land. Have you ever heard of something crazier? They kept telling me: ‘You must have angered someone? Who was it?’ No one. I lived in Germany, I am just starting my business here”, Christian says.

Tihomir Paškov, Head of the Administrative Department of City Property Management, has met with Begić several times. “It is not a tragedy, it is a pure catastrophe. An unimaginable set of circumstances. The only thing these people can do is initiate court procedures with the help of their lawyer”, he says.

Christian concludes that despite the entire situation, which has been very dramatic for the business and for the family, he will remain persistent until he accomplishes his plans, but he does not want to hear about Šibenik or Podi anymore.


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