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April 10, 2003 - Thursday |
Countering fraud in privatization auctions
It is usual that several potential buyers participate in privatization auctions, but then they don’t bid and there is no increase from the beginning price. Behind these kinds of sales usually hides a back room deal between potential buyers.
The beginning auction price is only 20% of estimated company value. If there is no bidding competition, a buyer can save a lot of money.
This is the reason why Agency of Privatization had annulled the auctions of Autoprevoz, located in Gornji Milanovac, and Bioprotein, located in Obrenovac.
The recently changed Decree on Privatization enables to Agency of Privatization to cancel the sale of a company if free competition is violated.
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