Author: Denis Tahiri
How Tirana DC was formed to build and rebuild in conflict of interest
The establishment of the "Tirana DC" company, opposed from the start by lawyers and civil society, has for weeks become a case under verification by the SPAK special prosecution. The Special Chief Anti-Corruption Prosecutor Arben Kraja tells ACQJ that the report was submitted to SPAK on January 7, 2021. "It is under investigation. The file has been merged with the criminal proceedings we have under investigation for the demolition of the theater ," Mr. Kraja emphasizes.
Owned 100 percent by the Municipality of Tirana and with the scope of "construction and reconstruction in the capital", this joint stock company has been approved by the Municipal Council since September 30, relying on a package of laws violated since its formation or during registration in the National Business Center, which licensed the active status. With an initial capital of 50 million ALL divided into 1 shares, the financing of "Tirana DC" is charged to the municipality as well as other revenues allowed by the legislation. At this point, in the decision-making of the Municipal Council, it is not specified to which legislation the financing from other incomes refers and what incomes it is about.
Legal problems of "Tirana DC"
As written evidence, the history of "Tirana DC" is presented, registered at the National Business Center on November 3, 2020 and that the partnership of the company under the ownership of the municipality with local and foreign private companies is underlined in the foundation act. But the "core" of "Tirana DC", according to the historical extract, is the board of the Administration Council, which has a three-year mandate until October 2023. It is composed of the deputy mayor of the Municipality of Tirana, Arbjan Mazniku, in the position of chairman. . Laura Deliu declares herself a member of the Administrative Council of "Tirana DC", but in the meantime holds the position of Legal Director of the Municipality of Tirana and the third, as a member of the Administrative Council of Tirana DC, is Redi Molla, previously in charge of the head of Water-Sewage Tirana, a task he held until September 21, 2020. A time that coincides with the initiation of procedures for the creation of the joint stock company of the largest municipality in the country.
But if Redi Molla was only a member of the company's management council, there would be no visible shadow light. The issue becomes debatable due to the triple role of the member Molla, who is also its administrator, as well as an authorized accounting expert since October 28, 2020 and with an indefinite term. All three of these tasks for the third on the list, contradict each other and bring conflict of interest, in a society which declares as its goals the promotion of economic development through investments with state capital and cooperation with the private or foreign sector.
In an interview for the Albanian Center for Quality Journalism, the lawyer Jordan Daci states the lack of independence as the essential legal problem in the composition of the Administrative Council of "Tirana DC", due to the very fact that the administrator Molla is subordinate to the shareholder, which is the municipality, and that between among the leaders is Arbër Mazniku. The latter also has a leading role in the company "Tirana DC".
"There are two problems, one in the formal legal aspect, which is certainly illegal for a very simple reason because referring to Article 158, 155 of the Law on Traders and Trading Companies, a member of the Board of Directors can also be an administrator, but on condition that the majority of the members of the board are independent. From the analysis of the specific case, there are three people, including the administrator. But on the other hand, the administrator is directly subordinate to the shareholder. The shareholder is the municipality, which is led by the mayor and the deputy mayor, who is currently one of the members ," explains Daci.
The lawyer insists on the illegality which deepens further according to him.
"The other two members are not independent, as they are the superiors of the administrator or the other member in the capacity of the sole general shareholder of this company. In this case, the appointment of this person is illegal, even more so based on the extract of the CCA, the gentleman also has the duty of an accounting expert, which is incompatible".
In the case of the third member Molla, the lawyer Daci emphasizes the sensitivity that the law has for the accounting expert, a function that in the case of "Tirana DC" is held by the administrator Molla.
"These are all the principles of control, auditing, let's not forget that the accounting expert has the duty of certifying the balance sheets and is an authority that, despite working for the company, is independent and cannot be controlled except by the structures that deal with the administration of accounting experts, which is an independent structure, but there is also a special directorate in the Ministry of Finance that deals with methodological control , " says Daci, who raises questions regarding the validity of this company's registration with the National Business Center.
The President of the Association of Accountants and Financiers of the Republic of Albania, Prof. Doc. Sheriff Bundo insists that the law prohibits double engagement;
" Absolutely not! The law prohibits an accounting expert from any type of dual employment, it prohibits him from taking on and performing the function of administrator of any type of company, private or public, as well as of the board of directors, so the law prohibits it , " says the professor.
Even Prof. Dr. Sotiraq Dhamo, professor at the Faculty of Economics of the University of Tirana, in the Accounting department, has the same attitude;
"In my opinion, it cannot be, the auditor is a third party, completely independent of the company. He cannot be a member of the Board of Directors and especially not the EKR (currently the law calls them Statutory Auditors)."
Should the CKB have registered the municipality's society?
" The Albanian Business Center, which has long since become a mere observer, without engaging in analysis, in this specific case could not register a person in these three capacities, under these conditions. Of course, if the first case (the composition of the Board of Directors) requires an analysis to see whether or not they are independent, the part of the accounting expert is an elementary thing. You cannot be an accounting expert, since you have obvious incompatibility , " Jordan Daci says emphatically for the Albanian Center for Quality Journalism.
Problems in the object of the activity
“Tirana DC” is probably one of the few state-owned companies that have a broad scope of activity. One of the objects of Tirana DC’s activity is “To carry out any lawful activity related to movable and/or immovable property, as well as to exercise all real rights of the owner over them, including, but not limited to, development, rental, emphyteusis, leasing, use, transfer, sale, use as a mortgage, pledge, guarantee or use in other forms provided for by the legislation in force… ”.
The Law on Local Self-Government gives the right to municipalities throughout the territory of Albania to create property development companies, but this law does not allow these companies to carry out the transfer or sale of state assets placed at the disposal of these companies. .
Article 9, point C of the Law on Local Self-Government expressly states that “The right of ownership is exercised by the relevant council, which cannot delegate the exercise of this right to anyone else”.
Also, Article 54, in its point E, very clearly defines that it is precisely the duty and competence of the Municipal Council to "approve the alienation or granting for use of third-party properties."
Another object of this society is borrowing, which the professor of Jurisprudence, Jordan Daci, says is not allowed by our institutions.
"In this specific case, the activity that they are trying to do with this company, even though if we take it without any prejudice it is an activity like any other commercial company at first glance, is not allowed by our institution, why? Among other things, it says that loans can be taken, normally any commercial company can take loans, but in a commercial company with a public or state character, the loan is practically held by the shareholder itself and the shareholder in this case is the Municipality of Tirana, which based on the law on public borrowing has specific procedures on how it is approved, because we cannot allow the municipality to sink Albania, since a municipality can borrow a billion dollars, and what does this mean? That then the Republic of Albania should be responsible? The municipality is no longer responsible," says Daci , who raises other questions about the object of the company.
Alienation….
"In principle, with this statute it can happen even though the law does not allow it, but in practice it can happen and then it can turn into situations where the property, if it has an efficient protection, may not be alienated. However, the state will at least pay compensation to those entities that enter into contractual relations with these companies, receive property as a guarantee, cannot receive it because the law does not allow sequestration and this necessarily translates into a financial bill , " says law professor Jordan Daci, who adds that the property cannot really be alienated, but this mechanism and this type of management will have a result that has the premises to be more severe than sequestration.
But whether or not this joint-stock company should have been registered by the KKB, with all the problems on its board, the latter claims that the law has tied its hands. The Albanian Center for Quality Journalism asked the CKB about the irregularities in the documentation submitted by the representatives of "Tirana DC". The answer of the KKB was that it was not the duty of this institution to check whether there were legal irregularities in the submitted documentation, but simply whether these acts are in the form required by the law.
Referring to the law, this institution explains that “meanwhile, point 2 of Article 54 of the Law “On Business Registration”, as amended, stipulates that: “ The CBRC cannot review the accuracy of the data or the authenticity of the documents attached to the application for registration or the compliance of their content with the requirements of the law in force” . Further, point 2 of Article 55 stipulates that “The CBRC cannot refuse registration if the application has been submitted in accordance with the provisions of this law”.
A response to these issues was also requested from the Municipality of Tirana, but until the moment of publication of this article, no official position was presented.
A criminal complaint against the Municipality of Tirana
With these questions, the Alliance for the Protection of the Theater prepared a file and directed you through a report to the Prosecutor's Office against Organized Crime and Corruption, targeting the mayor Erion Veliaj, the vice-mayor Arbjan Mazniku, the head of the Municipal Council Toni Gogu, as well as The administrator of Tirana DC, also a member of the Administration Council and Accounting Expert, Redi Molla. Even the members of the Municipal Council did not escape the report. Awaiting the results, Ardiana Kalaja enumerates the abuses and violations of the procedure that, as she explains for the Albanian Center for Quality Journalism, can lead to the avoidance of tenders.
" If we compare only the decision of the Municipal Council with the extract of the company in the National Business Center, in the council's decision there is a very short range of activity, where it only talks about constructions, reconstructions, reconstructions and implementation of projects in all fields. On the other hand, if we refer to the act of establishment in the NBC, there is a very developed activity, which would be the envy of any powerful company in Albania, but also in the region", says Ms. Kalaja, who adds that the creation of this company paves the way for avoiding tenders.
She says that creating a JSC in this form avoids all audits by the Supreme State Audit Office. “We have seen it as an instrument to extinguish demand and supply in the market, disrupting all free market equilibriums ,” says Kalaja.
But now, Adriana Kalaja says that "it is the duty of SPAK to identify those who are related to the illegal registration of this company , starting from the CKB counter, the employee who analyzes the file who should have rejected the creation of this company , since indeed one of the competencies of the Municipal Council is the creation of a joint-stock company in the interest of the work of the municipality, but always in reference to the general law, which states that a state institution creates a joint-stock company only for Services that are a monopoly ."
