HOW ŠOLAK BECAME THE RICHEST SERB: The partnership with Soros – a strategic watershed in Šolak's business career (3)
In a special series, Kurir reveals how exactly this controversial billionaire fulfilled his 'American dream' in the murky waters of the Balkan transition
The diplomatic dispatches from Belgrade, published by Wikileaks, indicate that Šolak's business rise reached a watershed in 2002, when a fund co-owned by George Soros invested USD 10 million in SBB in two stages. The diplomatic cable dated 1 June 2007 describes in detail how Šolak's business empire was created and who financed this undertaking.
The cable confirms what the Serbia media have long speculated about – that it was George Soros that provided the startup capital for the Kragujevac businessman. Many have found it strange and surprising that this US billionaire of Hungarian descent would be motivated enough to invest USD 10 million in a company owned by an unknown Kragujevac entrepreneur. Nevertheless, for one reason or another Soros gave Šolak the money needed for the cable operator KDS to be able to acquire its competitors and so gain a more significant market share.
In early May 2002, the ownership of KDS was transferred to Gerrard Enterprises. This company then transferred its ownership share to Serbia BroadBand S.a.r.l, based in Luxembourg, late in the same month. Soon after, KDS acquired multiple local cable operators from Belgrade, Niš, and Novi Sad. In March 2003, the company changed its name to Serbia Broadband – Srpske Kablovske Mreže (SBB). In the following year, the EBRD invested an additional EUR 15 million for 1 million shares in SBB so that Šolak's company could acquire 25 more local providers and, according to the report, gain a significant share of the Serbian cable operator market in this way.
According to the Wikileaks cables, in a conversation with the US Embassy econoff, Šolak said that in that period he had chosen not to confront Telekom Srbija directly for strategic reasons. Šolak's idea was, as he put it in the conversation, to "grow under the radar", although SBB's annual revenue and profit growth at the time had been exponential, standing at 60-70 percent.
On the occasion, Šolak acknowledged that his company had been able to grow as a result of signing an agreement with Telekom in 2003, allowing SBB to use Telekom's optical cable and other infrastructure. The cable further details that soon after this Šolak was beginning to be seen as a hindrance by Telekom, which then allegedly attempted to purchase Šolak's company. According to these claims, Ron Drake, chairman of Bedminster Capital, who ran the investment fund that owned SBB, travelled to Belgrade several times to meet top Telekom Srbija executives, including Draško Petrović, the state-owned company's CEO at the time. Šolak told the US Embassy officers that Petrović had been "determined to either buy SBB or destroy it", which the SBB owner rejected as an option.
In his conversation with the unnamed US Embassy officer in Belgrade, Šolak said that in late 2006 a group of unnamed Serbian businessmen allegedly approached Šolak about purchasing his company, which he refused.
Once his company expanded and Šolak moved to Belgrade, the Kragujevac company continued to operate with Šolak's brother-in-law Dušan Radosavljević at the helm. Radosavljević later sold his share in the company. He collaborated with SBB for years through the subcontractor Set Up Systems DOO Kragujevac, as its effective though not formal owner. This allowed him to amass a considerable fortune through inflated invoices and fictitious contracts.
In parallel with this success in the new line of business, Šolak was attempting to get back into the film industry. According to sources from the creative industries, he tried to purchase Centar Film from Jadranka Blanuša several times, but it was to no avail – Blanuša refused to sell to him the production company and its catalogue with over 100 domestic films.
COMING UP NEXT: The partnership with big investment funds and venturing into the regional market
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