Business Smells Blood

It’s a mistake once sang Men At Work and it is quite possible that Janez Janša was whistling up that particular tune when he admited some weeks ago that it was a mistake to sell Mercator, the largest retail chain in Slovenia to Laško brewery and Istrabenz.

Bloodhounds

It has now become clear that in a meeting in late August 2005 Janez Janša agreed to sell Mercator to Istrabenz, headed by Janša’s wartime buddy and former best friend Igor Bavčar, to Laško Brewery, headed by Boško Šrot and to KD Group, headed by Matjaž Gantar, then a member of Janša’s Strategic Economic Council (SECO), concocting up flat-tax ideas.

The deal was that KD Group, Istrabenz and Laško would buy shares of Mercator owned by both state funds (KAD and SOD) – 25% if total number if shares at their current price. This of course meant that the government didn’t make any extra money out of if. Remember, we are talking about the biggest retail chain the country. The bidding price should be way above market price. But that was the government end of the deal. There were rewards for the three companies as well. Laško got a hold of the largest distributor of its products, Matjaž Gantar was (and still is) to buy a strong bank and Igor Bavčar sort of got the go ahead for MBO of Istrabenz. By buying Mercator, however, the three companies also got a substantial ownership of Delo newspaper, Janša’s ultimate goal of this chess game. Soon, KD Group sold its shares of Mercator to Laško. Istrabenz did it some time later and Laško announced a formal takeover of the paper. But – it named Janša’s people to the paper’s supervisory board and not members of Laško management as it would seem appropriate. Laško thus gave Delo to Janša. Or so it seemed

Fast forward a year and a half and Janša gets stabbed in the back by Andrijana Starina Kosem, his hench-woman in the world of economy. Soon after that Laško (being now the sole owner of Delo) replaces Janša’s Board members at Delo and replaces them with its own people, naming Andrijana Starina Kosem president of the supervisory board. In the mean time Zoran Janković got elected as mayor of Ljubljana and is fast becoming a politial force to be reckoned with. Matjaž Gantar didn’t get the bank that was promised to him and quit SECO and joined LDS’s team of economic experts and Igor Bavčar and Janša became foes at least for the time being as Istrabenz sold it’s Mercator shares, enabling Laško to control the company and by extention own Delo completely. Shortly before that, in an attempt at keeping his job, Danilo Slivnik, CEO of Delo (an ardent Janša supporter whose assuming the position was part of the deal) fired the criminally incompetent Editor-in-Chief Peter Jančič and replaced him with Janez Markeš, Editor-in-Chief of a centre-right magazine Mag (acquired by Delo some years ago via political pressure as well). But of course Slivnik did not keep his job and Delo as a whole embarked on a path much more critical to the government than before – one must note that after the August 2005 deal Delo was purged of its more popular journalists and became very pro-government. Politicaly, this thing culminated for the first time with the vote of confidence to Janša’s government, which the PM abused for a massive reckoning with the media.

But it did not end there… In the dwindling days of 2007 Boško Šrot (who turned out to be a member of Pahor’s Social Democrats but left the party soon after the disclosure) gave an interview to his Delo, where he blatantly attacked the Prime Minister of meddling with the media but claimed that it was Zoran Janković who wanted to deal with Janša in the first place and that he (Šrot) was defending himself anyway he could. Zoran Janković replied early in 2008 (Tuesday last) and said that Boško Šrot is a liar and that he (Janković) never offered to deal with Janša.

Personally, I think the whole thing was pretty well summarised by ervinator in this post when he summarised statements by Jaković, Šrot and Starina Kosem as all of them saying that everything in this story is true except their allegend mischiefs.

Which brings us to the following question: what was Janša thinking? In hindsight it becomes paintfully obvious that he wanted Delo so badly that was willing to do almost anything to get it. And since the state couldn’t actually buy the newspaper, he had others (Laško, Istrabenz and KD Group) buy it for him. But he (that is, the government) didn’t own it. And so as Laško saw that it could achieve other goals with Delo (say, for example, support the opposition and make it eternally grateful, or perhaps take care of Andrijana Starina Kosem who was instrumental in Laško becoming as powerful as it is), it flipped Janša the bird and left him gaping. So the answer to the question “what was Janša thinking” is obviously “not much”.

But then there is the business angle to it. While controlling Delo and Mercator is a political question to Janša (and – quite possibly – Borut Pahor), it is also a business question to Šrot, Bavčar, Janković, Gantar and Starina Kosem. Of the five Bavčar is on weakest footing as he is basically a politician, whereas the other four are business people more or less politically active. And so one can be almost positive that the current accusations and counter-accusations are a negotiating tactic aimed at achieving the best possible starting positions for the period when Janša’s rule will end. Business smells political blood and Janša is at the moment gushing at the veins.

At the moment a powerful part of Slovene economy and the Mayor of Ljubljana are holding the front against PM Janša, while Matjaž Gantar and Igor Bavčar are awfully quiet. The former because he is about to start his own bank (not being able to buy one) and the latter because he is kept in check by attempted takeover by state-owned Petrol oil company. This all comes handy to the opposition which doesn’t really want to come off as unpatriotic by attacking the government during EU presidency.

But if this enterprise is succesful (i.e.: Janša is voted out of office) Janković and Šrot will present a hefty bill, not easily swallowed by the new government.