The Slovenian police have launched investigations into suspected abuse of office and fraud at the country’s former flag carrier Adria Airways, which declared bankruptcy on September 30, 2019 following three years of management by the German turnaround fund 4K Invest. In particular, law enforcement agencies are looking into allegations of malpractice and the disappearance of some 5.000 US dollars from the company’s safe in the immediate aftermath of its collapse. Pre-trial proceedings are currently taking place. Adria’s bankruptcy administrator, Janez Pustatičnik, told the “Delo” daily that auditors will begin a review of past operations at the company this month, however, there are currently no specific suspicions of misconduct.
Companies affiliated with 4K Invest, including Adria Airways’ former owner AA International Aviation Holding, have entered into liquidation following the collapse of the national carrier last year. The closure of these companies makes it difficult for law enforcement agencies to carry out an investigation and obtain necessary documentation. It is believed the fund funnelled money from Adria Airways and inked a number of highly damaging consultancy agreements on behalf of the Slovenian carrier with other companies in its ownership. 4K Invest has vanished from the business registries in a number of countries following Adria’s demise. Its website has been shut down and its phone numbers disconnected.
The turnaround fund has companies registered in Germany, Malta, the United Kingdom and Luxembourg. The Slovenian Ministry for Infrastructure previously noted, “Minister [for Infrastructure] Alenka Bratušek repeatedly warned that the airline’s sale to the German capital fund was a mistake and that the then government of Slovenia should have found a strategic partner within the aviation industry that would have ensured the long-term existence and development of the carrier”. The Slovenian Prime Minister, Marjan Šarec, branded 4K Invest as “crooks”. 4K’s questionable business moves involving Adria included the sale of its brand name, as well as absorbing the STBE company in December 2018, resulting in Stefan Beulertz, who was the head of STBE, becoming Adria's part owner. Mr Beulertz, a lawyer based in Malta who is close to 4K Invest, was implicated in the Paradise Papers, which exposed the rogue offshore finance industry. Mr Pustatičnik believes Adria’s ongoing bankruptcy proceedings will take four years to complete due to litigations, numerous recoveries and other procedures expected to be launched in Slovenia and abroad.
LOL, good luck finding a single Euro or any of these crooks willing to come to Slovenia in order to face justice!
ReplyDelete+1
DeleteLeave them alone there is nothing wrong or God forbid criminal in bancrupting an airline! Airlines go bust on a monthly basis its just a normal characteristic of such uncertain business like managing an airline. Air Italy went bust recently yet no one asks for criminal investigation and just look who was behind them. No one ever was found guilty for bancrupting an airline both state owned or private full stop.
ReplyDeleteThey are not being investigated for being incompetent. They are being investigated for being corrupt!
DeleteHere you go:
"It is believed the fund funneled money from Adria Airways and inked a number of highly damaging consultancy agreements on behalf of the Slovenian carrier with other companies in its ownership."
@Anonymous16 February 2020 at 09:29:
DeleteSarcasm? Sure hope so.
5.000 EUR missing...
ReplyDeleteDollars, sorry
DeleteFrom the safe. Who knows how much is missing from the accounts.
DeleteIt all looks very dodgy.
DeleteAnd to think there were some people here defending 4k just a few months ago.
ReplyDeleteDefinition of con artists.
DeleteDoesn't seem the public cares.
DeleteThe political responsibility of selling Adria to these idiots should also be investigated. Who chose 4K Invest over two other bidders and why?
ReplyDelete+1
DeleteDid anyone do any screening of this company before they sold Adria??
DeleteObviously not
Deletethere is evidence of 4K ties with Slovenian government at the time. That's why any investigation into 4K in Slovenia will never see an epilogue.
DeleteWhat other bidders?
DeleteThere was no serious bidder for Adria.
There was intro aviation and Binter Canarias.
DeleteIt is just unbelievable that Slovenia sold JP to them without proper research. Anyone involved in the sales deserves jail time.
DeleteAgree. No due diligence done. Shame.
Delete@anon 10:25. yes, at the non-binding stage. when binding offers were asked only 4K was left.
Delete@ 10.14 Nope
DeleteI really never saw a bigger bunch of incompetent people than this 4K. Selling brand name, trying to scam Sukhoi, insisting that everything is ok in the company, publishing winter timetable and announcing new routes literally days before the company went bankrupt…
ReplyDeleteI wouldn't call it incompetence, I'm pretty sure this is what they've planned.
DeleteSuch a shame Adria was sold to them. Maybe things would have been different had it not.
ReplyDeleteAnd if Adria wasn't sold to them, they would have gone bust 3 years ago.
DeleteA good warning to the governments of Croatia and Montenegro. Be careful who you choose for your partners.
ReplyDeleteThe Montenegrin government was very close to selling YM to these conmen.
DeleteWhat's sad is that none of them will get arrested for their deeds.
ReplyDeleteAll 4K managers should be named and shamed for their destruction of Adria.
ReplyDelete4K was a fraud.
ReplyDeleteI think it is more than obvious that they used Adria simply to extort money.
DeleteHow many companies or affiliated companies does 4k have?
ReplyDeleteAround 20
DeleteJeez
DeleteThe 4K octopus
ReplyDeletehttps://i.imgur.com/3b4gMkl.png
The path of corruption.
DeleteSad.
ReplyDeleteFantastic result of a privatization process. Congratulations to all sides involved.
ReplyDelete4K made a minimum risk investment in Adria and got maximum return!
DeleteWhat happened to the Estonian CEO in the end?
ReplyDeleteHe is on the advisory board of this company.
Deletehttps://naadvisory.com/consultants/sven-kukemelk/
Although I don't think he had much to do with the corruption at Adria. He joined the company quite late.
DeleteI agree. I think they brought him in at the end since they realised they needed someone who understood airlines to sort their problems. When it came to dodgy accounting, it seems they already had that expertise without him.
DeleteThis is sad. Shame on you 4K Invest.
ReplyDeleteAdria became a farce from the first day 4K took over. There is no one else to blame but the Slovenian government.
DeleteAdria was a farce well before 4K took over, just not in public.
DeleteOuch, what an unpleasant situation. Who would've thought that this company will go belly down thanks to a wannabe company like 4K? They were so lost during the company's management and surely stole so much.
ReplyDeleteAccording to their LinkedIn profile, they are "specialists" in various fields but not aviation!
https://www.linkedin.com/company/4k-invest
That said, JP's story reminds me of LZ (former Balkan Bulgarian Airlines), which was sold to Gad Zeevi - an Israeli business man for 150 thousand dollars! Thanks to him, he managed to destory the company that used to fly to SIN, JFK, HRE, JNB. But of course, that was sadly due to the financial crisis that faced the country in 1997.
https://www.themarker.com/misc/1.56502
Anyway, hoping that Slovene aviation recovers this year and the terminal opening goes well next year.
I hope for some sort of revival for Adria.
DeleteSo how many Bulgarians today fly to SIN, JFK, HRE and JNB?
DeleteAlmost none. Those destinations were purely transfer.
DeleteYugoslavia and the region used to offer very good prices to African students in the 70-80s to Moscow and GDR.
@15.54 what would be the point?
DeleteSo what's the point of having a loss-making (or on artificial support from government) national airline, just to have large number of transfer passengers?
DeleteJP was going down bankruptcy lane much before 4K came into the picture.
ReplyDelete+1
DeleteBut people keep blaming 4K...
Business was not good before 4K but you never heard about mass cancelations, delayed flights, mergerd flights etc etc.
DeleteJP was doing similar to every airline in region.
So yes, instead of steping forward to successful business, JP made complete oposite.
+1 last anon
Delete"JP was doing similar to every airline in region."
DeleteIn other terms, being on the verge of bankruptcy. Sell of JP only extended the inevitable.
With hindsight, the government should have liquidated the company in a more progressive and less painful manner for everybody involved - passengers, creditors and employees, instead of selling it and let everybody else do the bloody work for them.
So actually you believe that all airlines in region should simply bankrupt?
DeleteI totally agree with govrnment of Croatia, Serbia and Montenegro when they decided to help financially survive their state owned airlines.
So pumping tens of millions of EUR year after year after year until the end of time is the solution?
DeleteIf government would be serious about saving Adria, they would need to find somebody with unlimited mandate. First, they'd need to decide what is profitable and what Slovenia as a country needs. Then, get rid of everything except that core business - people (especially back office), aircraft, contracts with suppliers, etc.
But with people's mindset that they can do whatever they want and the government will foot the bill regardless, those airlines will never be at least a positive zero.
At some point I can agree with you but still if you cancel one unprofitable route that can have effect on route which is profitable.
DeleteAt least there should be competent people at right positions and not one which are placed by politicians.
And it was not tens of millions each year. Before 4k it was "only" few millions per year which of course could be much better.
Hope charges are laid.
ReplyDeleteI read a report in the media about the financial mismanagement at Adria by 4K and the tricks they used to show a more positive balance sheet. The things they did were crazy. Selling and buying the brand name, offshore accounts, creating and bankrupting companies etc. Really murky business.
ReplyDeleteI don't get why Slovenian authorities have been so hesitant in investigating 4k until now.
ReplyDeleteSee above comments.
DeleteThe whole story was bound to end this way.
ReplyDelete