Serbian Police make eight arrests in Galenika corruption case
Galenika controls one-third of the pharmaceuticals market in Serbia.
Serbia’s Interior Minister Nebojsa Stefanovic confirmed that eight people have been arrested on charges of criminal abuse of office and causing losses of about EUR 75 mln at Galenika, a state-owned pharmaceutical enterprise, reported Serbian newswire B92 May 25.
“The investigation will be carried out and we will see where the money went,” said Stefanovic, as cited by the newswire. “It is not enough to prosecute those responsible for the criminal offense. We also must find out where the embezzled money is right now.”
Those under arrest include Galenika’s former General Manager Nenad O. (60), Galenika’s Chairman of the Board Dejan B. (39), Assistant General Manager for Economic Affairs at Galenika Dragan S. (56), former CEO and Chairman of the Board at Velefarm Dagoljub V. (66), Marketing Manager at Velefarm Rade L. (45), General manager and authorized Velefarm’s representative Momir V. (64), Head of Velefarm financial management department Ljubica K. (58) and Velefarm’s Accounting manager Tatjana V. (57). According to Serbian newswire Tanjug, police are still looking for Velefarm’s CFO Miroslav M. (60).
Stefanovic added that the detained persons have been charged with enabling Velefarm, a wholesaler of drugs and medical devises, to obtain a EUR 2.246 mln loan, which Velefarm could not repay and which was then assumed by Galenika. The suspects allegedly caused losses of about EUR 75 mln to Galenika from November 2008 through 2012 by allowing financial gain to Belgrade-based legal entities operating within Velefarm Holding and linked to Dragoljub V., a former Velefram’s CEO and chairman of the board.
The minister stated that Galenika put Velefarm in bankruptcy as of 2012, over a large quantity of drugs worth ca. 75 mln for which Velefarm issued promissory notes as a means of payment—although it was known at the time that the wholesaler would file for bankruptcy and that the notes would not be charged.
Stefanovic added that the ongoing Galenika corruption investigation is one in the series of investigations concerning 24 controversial privatizations in the country. The interior minister also stressed that the entire operation has so far resulted in 135 arrests, and indictments have been confirmed for all arrestees, which should be seen as a sign of good police work.
