The oral proceedings due to the expropriation of shareholders and bondholders of Slovenian banks within the "Kotnik and others" case took place before the Grand Chamber of the European Court of Justice (ECJ) in Luxembourg on Tuesday. On the part of the PanSlovenian Shareholders' Association (VZMD), which was first to initiate procedures for the constitutional assessment of the Banking Act (ZBan) two years ago, the interests of the expropriated holders were competently represented by the lawyers Mr. Miha Kunič, Ms. Tamara Kek and Mr. Jorg Sladič, as well as the prime mover of the Initiative within VZMD, Mr. Tadej Kotnik, and the VZMD President, Mr. Kristjan Verbič.

The other party was represented by two foreign law firms, two state attorneys of the Republic of Slovenia and eight employees of the Bank of Slovenia. The Bank of Slovenia announced that the total costs of this representation will not exceed EUR 85,000!!! In this respect, VZMD seriously questions the role of the Bank of Slovenia as the procedure before the ECJ refers to the constitutionality of the Banking Act and not to the individual contentious cancellations and their economic justification. Namely, the key issue of the procedure is whether the European Commission's Banking Communication (as regards Slovenia) was the binding legal reference. VZMD believes that the mentioned Communication is not binding, which has also been validated by its author - the European Commission.

VZMD also stressed that the one of the opposing parties is also the State Attorney's Office of the Republic of Slovenia, which is to represent the Republic of Slovenia, and as such includes the Ombudsman of the Republic of Slovenia, the National Council and other courts, all of which are also initiators of the Banking Act constitutionality assessment. 

Prior to the public hearing in the EU Court in Luxembourg, last week's show on TV Slovenija called Točka preloma (Break-even point) opened up the opportunity to present the positions of lawyers Mr. Miha Kunič and Ms. Tamara Kek (VIDEO), who through shareholders' and bondholders' agreements as part of VZMD, directly represent over 1,100 expropriated aggrieved parties. Apart from the two lawyers and as part of the expert team of VZMD, the public hearing which was held today in Luxembourg was also attended by the lawyer Mr. Jorg Sladič, a member of the VZMD Expert Council, Mr. Tadej Kotnik and the VZMD President, Mr. Kristjan Verbič. The Bank of Slovenia announced that it will be represented at the hearing which takes only 10 minutes per party - by the Grilc Vouk Škof law firm and the Freshfields Bruckhaus Deringer law firm from London - and that the total costs of this representation will not exceed EUR 85,000!!!

These days bear witness yet to another facts and moments indicating that cancellation of subordinated bonds and shares of Slovenian banks actually was a plunder of the century. Last week's media publications regarding the conflict of interests of the Executive Director of the Bank Assets Management Company (BAMC), Mr. Janez Škrubej - who was previously the managing director of Deloitte Svetovanje, d.o.o.  - time and again corroborate the facts which have been pointed out by VZMD ever since the shocking expropriations occurred almost two years ago. The consultancy (!!) Deloitte namely did, for an  enormous amount (again as instructed by the Bank of Slovenia!) a calculation of an extremely negative capital of NLB which triggered the cancellations of holders of shares and bonds and transfers of receivables to DUTB, while its managing director simultaneously stood for the Executive Director of BAMC and was selected out of 250 candidates!

VZMD has since March 2015 pointed to the fact that the Bank of Slovenia performed a manipulation (VIDEO PRESS RELEASE) and commissioned assessments at Deloitte Svetovanje and Ernst & Young Svetovanje consultancies, which are neither auditing firms nor independent corporate and real estate valuers, which they should be pursuant to the Act Defining the Measures of the Republic of Slovenia to Strengthen Bank Stability (ZUKSB) – certified valuer shall be a natural person who has the expertise in valuing companies and real estate. Since the companies mentioned are not auditing firms they cannot be independent valuers as required by the Banking Act. An auditor must follow the International Accounting Standards (IAS), whereas a consultancy is not obliged to. Deloitte expressly stated in the assessment report that no IAS had been applied(Counterarguments to recent statements by the Bank of Slovenia along with additional disclosure of misleading statements, falsehoods and unlawfulness, March 12, 2015).

The Slovenian national team has successfully qualified for the European handball championship which will take place in Wroclaw, an important regional capital in Poland, in January 2016. In one place, we are going to bring together sports, business, investing and promotional interests in the exceptional juncture of business and social meetings - »SLOVENIAN CENTER – I FEEL SLOVENIA«, which will be located in downtown Wroclaw and serve as a presentation pavilion of Slovenia.

Under the aegis of the President of the Republic of Slovenia, Mr. Borut Pahor, the Slovenian Center was established together by the Handball Association of Slovenia, Ministries of the Economy and Foreign Affairs, Chamber of Commerce and Industry of Slovenia, Slovenian Tourist Board, SPIRIT Slovenia, and PanSlovenian Investors' and Shareholders' Association - VZMD.

As part of its international business-investor programs, Invest to Slovenia and International Investors' Network, VZMD hereby invites all interested business entities and institutions to take this opportunity to introduce themselves and actively participate in the Slovenian Center in downtown Wroclaw, Poland. For this purpose, VZMD and its partners also offer exclusive and definitely the most favorable packages of air transports, accommodations, presentations and promotions at the Slovenian Center, attendance at the official reception of the President of the Republic of Slovenia followed by a banquet, attendance at the business forum and many business meetings, "Day of Investment Opportunities" and the reception of the Slovenian-Polish Business Club.

VZMD opted for the active engagement also because of very successful participation in the highly visible Slovenian Center during the World Handball Championship in Qatar, in January this year. In addition, VZMD has had valuable experiences in collaboration with the Polish Investors' Association, Warsaw Stock Exchange (WSE) and many other Polish business entities and institutions, and we have maintained active presence for seven years at important international business events; moreover, in 2011, we organized a special Slovenian Day at the Warsaw Stock Exchange.

If you would like to participate or collaborate in the events, please confirm this at your earliest convenience via one of the contact points for VZMD's international business-investor programs: telephone +386 51 770 771 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it..

Last night in New York City, the grand opening of the Consulate of the Republic of Slovenia and the evening reception of the Association of the Luxembourg Fund Industry, (ALFI) took place, which, as part of the 9^th this year's tour of the international business-investor programs of the PanSlovenian Investotrs' & Shareholders' Association (VZMD), was attended by Mr. Kristjan Verbič, the VZMD President and the member of the Executive Board of the European Federation of Financial Services (Better Finance). Supported by ALFI, today the renowned New York's Metropolitan Club will be the venue for the business breakfast with the local influential finance industry representatives, which will be followed by seminars organized together with the Luxembourg Private Equity & Venture Capital Association (LPEA).

The program ALFI US Roadshow, however, began on Monday with the conference in San Francisco, and went on with the business breakfast at the University Club of Chicago on Tuesday. On this occasion, Mr. Verbič spoke with many representatives of the finance industry, among others from the following companies: J.P. Morgan, State Street, HSBC, PwC, KPMG, Deloitte, Royal Bank of Scotland, BNY Mellon, BIL Manage Invest, BNP Paribas, Tortoise Capital Advisors, etc., and the other parties showed their interest in the situation in Slovenia. The attendees presented and discussed about many opportunities across the world, among which was the rapid growth of the middle class (e.g. Brazil, China), as well as significant challenges associated with the traditional pension systems and the role of various funds and their managers. The analysis of political initiatives and decisions (with particular focus on the EU) related to opportunities and promotion of investments and business operations in Europe and elsewhere was carried out.

This tour of the international business-investor programs of VZMD will continue with the attendance at the traditional Saint Martin's Day feast at the New York's Slovenian Church of Saint Cyril and the reception of the International Club of DC (ICDC), promotionally entitled »A Taste of Slovenia«, which will take place at the Embassy of the Republic of Slovenia in Washington, and where the tasting of Slovenian superior quality wines and many other Slovenian delights will be organized. VZMD with the programs Invest to Slovenia (investo.si) and International Investors` Network (invest-to.net) has, however, for a while collaborated with some Slovenian wine producers - and has taken care of presenting them in the USA substantially since 2013 andthe tour in Canada and the USA. 

The Slovenian national team has successfully qualified for the European handball championship, which will take place in Wroclaw, the important regional capital in Poland, in January 2016.

As part of its international business-investor programs, Invest to Slovenia - investo.si and International Investors' Network - invest-to.net, VZMD hereby invites all interested business entities and institutions to take this opportunity to introduce themselves and actively participate in the »SLOVENIAN CENTER – I FEEL SLOVENIA«, in downtown Wroclaw, Poland. The Slovenian Center - aimed at efficiently presenting Slovenia as a coherent whole and combining promotional, business and sports aspect in one place - was established by the Handball Association of Slovenia in collaboration with the Ministry of the Economic Development and Technology, Ministry of Foreign Affairs, Chamber of Commerce and Industry of Slovenia, SPIRIT Slovenia, Slovenian Tourist Board and the PanSlovenian Investotrs' & Shareholders' Association (VZMD), under the auspices of the President of the Republic of Slovenia, Mr. Borut Pahor.

VZMD opted for the partnership and active engagement within the Slovenian Center during the European handball championship in Poland especially because of very successful participation in the highly visible Slovenian Center during the January World Handball Championship in Qatar. In addition, VZMD has had valuable experience in collaboration with the Polish investors association, Warsaw Stock Exchange (WSE) and many other business entities and institutions, whereby in 2011, VZMD organized a special Slovenian day at the Warsaw Stock Exchange(VIDEO), while the VZMD President had since 2009 been actively engaged in important international business events in Poland until last year's international conferences »Warsaw Capital Market Summit 2014« and »Building Market Economies in Europe: Lessons and Challenges after 25 Years of Transition«, award ceremony in »The Bridge Award 2014«, »Best International Emerging Europe Long Fund 2013/2014« and »Best IPO on the Warsaw Stock Exchange 2013/2014«, etc.

Following the state recapitalization of the Irish bank Permanent TSB in April, without interfering in shares and subordinated bonds of the existing holders, and the state recapitalization of the Italian Bank BRC, whereby the subordinated bondholders were officially expropriated and entirely paid off on the same day in June, and following the invalidation of the cancellation of the subordinated bonds of the Austrian bank Hypo at the Constitutional Court of Austria in July, in October, we also witnessed the first measures of the fourth restructuring of Greek banks in the past six years, which clearly indicate that not even in Greece where the four state-owned banks have received as many as EUR 45 billion of the state aid which will increase by another EUR 10 billion at least, there will be no cancellation - neither of shares nor bonds!

'Here we could arrive at a simple conclusion that the Slovenian authorities allocated EUR 264 million of the 30-year loan and additional EUR 1.6 billion of guarantees to pay off investors in shares and bonds of Greek banks, whereby they at the same time extremely arrogantly and perniciously for the Slovenian people and the economy - which they have been trying absolutely moronically defend even today -  executed the entire and uncompromising expropriation of investors in shares and bonds of Slovenian banks, which again proves a sad rarity in the EU, with which our authorities willfully and actively cast us in the role of third-class citizens of Europe,' was a sharp criticism by the VZMD President, Mr. Kristjan Verbič in the revealing article 'Total rip-off of bondholders only in Slovenia' in yesterday's Delo newspaper, in light of the Government Report on Guarantees of the Republic Slovenia and the financial aid granted. Among other things, the article in the Delo newspaper also reveals that out of four Greek banks which will be subject to the state recapitalization, two will present the subordinated bondholders with the choice between early discounted redemption and conversion into ownership shares, whereas the other two only with the conversion into ownership shares, both offers being voluntary, whereby the existing shareholders will not lose their shares, but those who acquire new shares through payment or conversion from bonds, will simply join them in the ownership structure.

The article also quotes the new outrageous statement by the representatives of the Bank of Slovenia, something along the lines that is not problematic as out of all EU Member States and their banks (recipients of the state aid) the cancellation was necessary only in Slovenia and even in all six banks, which have had subordinated bonds. As regards the protection of the shocking unique cancellations, the fact that the Bank of Slovenia does not refrain from even the most absurd actions is indicated in their another quotation saying that discounted redemption of subordinated bonds – therefore, precisely the measure taken by the banks in Greece – was forbidden for the banks in Slovenia as »the redemption would supposedly reduce the protection of the bank creditors«!!! In construing that subordinated bonds are debt instruments and that for this reason also their canceled holders are bank creditors, Slovenian banking regulatory authority has faked ignorance or may just have thought that their cancellation without any compensation did not imply reduction of their protection?!

VZMD is again calling upon the Government of the Republic of Slovenia, Ministry of Finance and the Bank of Slovenia to finally concede that the decisions on the cancellations and expropriations which were taken at the end of 2013 have inflicted far-reaching damage and represent a terrible mistake. Hence after two years of pretended ignorance, misleading statements, denials and delays - which have, in addition to the economic damage, even caused numerous human tragedies - they should finally get down on finding ways how to rectify the mistakes in a constructive manner after all.

The PanSlovenian Investors' & Shareholders' Association (VZMD) is pleased about the commendable ranking of Slovenia in terms of minority shareholder rights protection – 7^th place in the category »Protecting Minority Investors«, which is one of the ten indicators of the World Bank's »Doing business 2016« report. At the same time, it is noted that certain measures and criteria unfortunately do not reflect the real situation in practice; moreover, as it seems, the scores primarily build on legislation or administrative law – defined in acts, statutes, codes, etc.

In view of the ten years of experience directly in the field, VZMD – as the only Slovenian internationally engaged and recognized organization in the field of protection of rights and interests of minority shareholders and individual investors – believes that the chances for better scoring are much higher. In this context, VZMD stresses the importance of finding an appropriate solution for the unjustifiable total expropriation of holders of subordinated bonds and shares of nationalized Slovenian banks, as this a unique case in the EU for which significantly even the European Commission stated its position, whereas comparably also the Austrian Constitutional Court. The Slovenian Constitutional Court treated the case of the review of constitutionality of the scandalous amendment to the Banking Act, which served as a basis for expropriation of over 100,000 Slovenian and foreign individual investors (indirectly through pension funds, etc. over 500,000 investors), with the absolutely high priority in December 2013 - but the decision has not been reached yet!      

November will mark the beginning of this year's 9^th tour of the international business-investor programs of VZMD: Invest to Slovenia (investo.si) and International Investors` Network (invest-to.net), which will be characterized by business events of the Association of the Luxembourg Fund Industry (ALFI), the Luxembourg Private Equity & Venture Capital Association (LPEA), the International Club of DC (ICDC) and the International Financial Litigation Network (IFLN).

As part of this tour, the VZMD President, Mr. Kristjan Verbič, will be actively engaged in the international investment and business conferences, meetings, seminars and receptions in San Francisco, Chicago, New York, Washington and London. In addition, Mr. Verbič will take part in events dedicated to presentation of Slovenia and its business, touristic, wine and food offer. In New York City, he will attend the official opening of the Consulate of the Republic of Slovenia, traditional Saint Martin's Day feast in the local Slovenian Church of Saint Cyril , but at the Embassy of the Republic of Slovenia in Washington, DC, he will attend the reception of the ICDC Association promotionally entitled »A Taste of Slovenia«, where the tasting of Slovenian superior quality wines and many other Slovenian delights will be organized.

With its programs investo.si and invest-to.net, VZMD has for a while collaborated with some Slovenian wine producers - and has taken care of presenting them in the USA substantially since 2013 and the tour in Canada and the USA. The VZMD President will end this tour by visiting London, where the working session of the IFLN international network will take place. The discussion will be primarily focused on further activities of IFLN, related to the 'Forex' case, 'Libor manipulation', 'Kazakhstan's BTA Bank fraud' case and the International Approach to the 'Volkswagen scandal', where IFLN took proceedings on behalf of affected investors, shareholders and users, however potentially suppliers as well, for which Mr. Verbič stood up already in the recent annual meeting of the World Federation of Investors (WFI) in Milan, Italy.

VZMD will also take this opportunity to provide for the efficient presentation of companies, institutions and investment projects included in invest-to.si and invest-to.net. All interested parties may directly participate in individual events as part of the 9^th international tour or submit their items and informational and promotional materials – application for participation or submission of materials is possible up until and including TUESDAY, November 3, 2015, inthe new headquarters of VZMD, at the street Hrenova ulica 13, 1000 Ljubljana, Slovenia, EU.

On Monday, the VZMD President received a formal response from the Chairman of the Board of Podravka d.d., the new majority shareholder (51,54%) of Žito, d.d., at the request of VZMD to put profit sharing of EUR 25,861,078.62 for 2014 on the agenda in the upcoming general meeting. The Chairman of the Board of Podravka, Mr. Zvonimir Mršić, has in its response, among other things, stated that "the request/invitation by VZMD to put the additional item on the agenda of the general meeting should be addressed only to the Board of Žito" as regards dividend payout. Podravka - as the new majority shareholder who requested to convene the new general meeting - has been called on by VZMD to establish the legal status in terms of the decision 2.1. of the 21^st general meeting held on June 19, 2015 and pursuant to Article 399 of the Companies Act (ZGD-1) and to ensure that 9,206 shareholders receive their dividends as provided by law. A similar letter was also sent to the management and supervisory board of Žito, however no response has been received until today, neither a notification regarding additional item on the agenda of the general meeting convened on November 18, 2015. The additional item of the agenda may well be proposed by shareholders who possess on aggregate 5% of the equity, therefore - particularly regarding the 7-day period of the general meeting convocation (which passed in the meantime) - this could be provided for by the new majority shareholder, who will be accountable for adoption of the decision in the general meeting.

In the letter, VZMD drew Podravka's attention to the fact that the adoption of the decision on profit sharing would also be the reason to withdraw the litigation, which has incurred unnecessary costs for Žito, as well as for VZMD and other shareholders of Žito, and at the same time the reputation of Žito, and consequently of Podravka has been increasingly tarnished. Through a law firm and on behalf of 111 shareholders, at the District Court in Ljubljana in July, VZMD brought a lawsuit for challenging the disputable decision on not sharing the profit. In September, VZMD was summoned by the judge at the District Court, Ms. Urška Kusič, to take a stand regarding the appeal from Žito whereby the VZMD President stressed the following: "it is utterly despicable that Žito, despite its dividend payout policy, clear legal basis and last year's balance sheet profit amounting to almost EUR 26 million, resorts to legal  maneuvers to avoid payout of at least legally provided minimum dividends totaling EUR 590,614.72, which is less than 2.3% of the last year's profit". In their response to the suit, Žito also contests the amount of the court fee paid by VZMD, and they propose that the Court orders the minority shareholders to execute an additional payment of the underpaid court fee, in their opinion.

On this occasion, VZMD would also stress, that at least from the Supervisory board of the company where minority shareholders have their 'representative' one might expect the proper conduct in the interest of shareholders,  particularly minority ones. Instead, Žito even attempts to substantiate the unjustifiability of the lawsuit and VZMD's requests through voting of the deputy chairman of the Supervisory board Mr. Rajko Stanković, who, as an assignee of some shareholders, and as well as the MDS Association President (together with the authorized officers of the MDS Association Mr. Ljubiša Stanojević and Mr. Goran Gojković) expressly against profit sharing in the general meeting! VZMD wishes to caution that such conduct is entirely against the interests of minority shareholders, which may be the reason for Podravka to propose Mr. Rajko Stanković for the new term as the only one from the previous Supervisory board?!

The associates and lawyers Ms. Tamara Kek, Mr. Miha Kunič and Mr. Jorg Sladič, who on behalf of the PanSlovenian Shareholders' Association (VZMD) represent over a thousand expropriated holders of subordinated bonds and shares of Slovenian banks before the EU Court in Luxembourg, have - in the process of preparing responses for the Constitutional Court of the Republic of Slovenia as to whether the European Commission's Banking Communication is indeed binding(?) and whether it actually invalidates provisions of other legal acts pertaining to investor rights  – tabled the motions to the EU Court to hold oral proceedings in regard to this case.

In the written opinions provided to the EU Court, the Bank of Slovenia (BS), State Attorney's Office and the National Assembly of the Republic of Slovenia have stated a number of blatant falsehoods about the supposed extent of catastrophic situation in Slovenian banks in December 2013 and which is why - only then and only in Slovenia - the Banking Communication of the European Commission was deemed binding, whereby the entire cancellation of all subordinated bonds in all banks recapitalized by the state was supposed to be the only possible interpretation of the Communication. Thus in the written opinion provided to the EU Court in April 2015, the BS outlined the macroeconomic situation in Slovenia in December 2013 using the assumptions, which had already been used for the cancellation for its justification that is "clarification" of the cancellation – therefore along with continuation and even additional deepening of recession – whereby BS "overlooked" that, at the time of writing the opinion, it had been clear for more than a year that the assumptions were utterly unrealistic. What is more - as early as on December 4, 2013, which is two weeks before the BS had ordered cancellation, on the website of Eurostat, an official statement that the quarterly GDP of Slovenia remained stable in the middle of 2013 was published (http://ec.europa.eu/eurostat/documents/2995521/5168826/2-04122013-BP-EN.PDF)!

As if this had not sufficed for misleading the highest EU Court, in its written opinion, the BS also described the capital deficit of Slovenian banks during the fall of 2013 using highly unrealistic evaluations, whereby it "forgot" to mention that to make the evaluations it hired consulting companies which are not adhering to accounting standards and principles and had never before performed such tasks, and that the BS chose a "limited scope of information" which served as a basis for the consulting company to make the evaluations and provided - nevertheless for a fantastic fee (in excess of EUR 10 million) - even "clarifications" how they should be made (www.finance.si/8824165/). The claims of the BS, that in December 2013, both the situation in Slovenian banks and the macroeconomic situation in Slovenia were supposedly extremely poor, were also uncritically taken as a naked fact also by the National Assembly of the Republic of Slovenia and the State Attorney's Office in the written opinion and thus "itself reinforced the viewpoint" that the specific situation in Slovenia in December 2013 called for a specific legal interpretation of the European Commission's Banking Communication.

Albeit it is formally and legally clear that the question as to whether the European Commission's communications are to be treated as binding EU legal acts, and the GDP data of an EU member state and the capital deficit of certain banks in the state - even if they were credible - totally irrelevant, simultaneously reiterates a fact that the EU Court was provided with the information by the three important institutions in the Republic of Slovenia, whereby each of them claimed to have formulated the viewpoint by themselves and in a professional manner. For this reason, in the motion for the oral proceedings the authorized persons of expropriated holders stress that - in case the EU Court decides to consider the claims of the institutions in its judgment - the oral proceedings is all the more necessary as it will enable the expropriated holders, amongst other things, to present the Court official documents clearly indicating that the real situation in the Slovenian economy and Slovenian banks was significantly better than the one, which was claimed to be during the cancellation/expropriation by the Government of the Republic of Slovenia, and which is being referred to in written opinions.