The story of the failed project for the French commercial giant Leclerc, that planned to open eight shopping centers in Croatia, is connected to a field that has not been used for construction. The field has become the main prey for the engineering-attorney master because it was the ground for Leclerc giving up its vision of opening a shopping center in Španska. The fallow ground, which covers 1886 square meters, by itself would not be attractive if it did not find itself in the middle of the land that was going to be bought by French commercial chain Leclerc six years ago, where they planned to construct an attractive shopping center on the 70,000 square meters. During the past several years it has been sold four times, and the original price of 132,000 DM grew to an enormous €1.7 million.

The Leclerc shopping center project failed and many companies went bankrupt; PBZ had problems paying off the 15 million Euro loan, and Leclerc moved its plans to SloveniaDragan Stupalo was involved in this operation, as witnessed in the documents, from the very beginning. He is an architect, apparently a successful business man with strong connections in the business world, who lives in Split in a large villa and who claims that his fortune was made by working outside of the country. His screen was his carpenter, who turned out to be the owner of the conflicting field- the main negotiating trump.

The fight to build a Leclerc shopping center, as the public found out from daily newspapers, left many victims behind: the investment that originally totaled €25 million grew to €50 million, many companies went bankrupt, workers did not receive their wages, Privredna Bank Zagreb has problems with payment of the €30 million in loans, Leclerc decided to not invest in Croatia and moved instead to Slovenia, and the building that was meant to be completed in the fall of 2001 is still not completed.

In the official explanation, the reasons for the failure were stated as unsolved property rights relations and a slow building permit. The background and real measure of the plundering and games was uncovered in a one hundred page list that is in Nacional’s possession. The unknown author wrote the entire genesis of the case, explaining how everything occurred behind the stage of preliminary discussions, official meetings, while those involved covered their accusations with plentiful documents. The mentioned list does not only uncover the reasons for failure with the Leclerc project, but also exposes to the general public as to which Croatian businessmen received a large profit from these ventures.

The modern shopping center in Španska was meant to be the first in a range of eight planned Leclerc centers in Croatia. The French managers trusted the location selection, as well as solving bureaucracy, legal and engineering issues to Ante Neno Barada, an architect who spent years living and working in Switzerland and who can brag about his architecture in Todorić’s Superkonzum. Barada established the Urba West Company for the needs of the project- and that is how he avoided tax responsibilities, by not applying the difference in property price for personal possession as opposed to business possession- and in 1998, he signed an Agreement on realization and project design. Barada hired Frano Zorić, owner of GTEMING, for technical support. The location in Španska seemed ideal: a large parcel, a seemingly normal and uncultivated field that was privately owned; part of the land was going through a phase in which it would be returned from national property, and a section was regarded as being city property which would secure that negotiations with the city government would not have large obstacles. When a company manages to become the majority owner of land, there exists the possibility of direct negotiations with the city government on the official marking of city tariffs.

Leclerc’s business plans and their Croatian partners received support by the city government, more specifically Miljenko Cvjetko, the then deputy mayor, in August 1998. He was the chief of the City Construction Institute, and his support was unusual because of the fact that it was a large investment by a foreign company.

Frano Zorić and Niko Zorić played a key role in the beginning. Frano Zorić, as the owner of a construction consulting company, had an agreement for business cooperation with Urba. He met up with his cousin, Niko Zorić, for the first time at Miljenko Cvjetko’s office, who “introduced him as a man from the same region and who shares the same last name”. Niko Zorić apparently convinced Frano Zorić that he had connections in the city administration, presenting himself as an expert that might possibly mediate in the purchase of city land for the Leclerc project. Several days after this, Frano Zorić “triumphantly announced that he had a man, Niko Zorić, that would solve the problems with the city land” to his partners. Only a few months later, his cousin Niko Zorić joined the competition with Dragan Stupalo and became part of the group that provoked drama and destroyed the project.

Frano Zorić convinced Nacional’s report that he coincidently ran into his cousin at Miljenko Cvjetko’s office and angrily stated “how he does not want to hear of him ever again because he destroyed the project with his scheme.”

With a supporting letter from the city government in his pocket, Frano Zorić began negotiations with the owners of the private land and signed a pre-agreement, where he paid out a cash advance, and agreed to pay the remainder after the construction parcel was taken over. He discussed a strategy for the city with his cousin.

His cousin Niko Zorić began the action of purchasing, which allowed him to hold the entire Leclerc project in his fist: in morally suspicious conditions, he became the owner of the 1886 square meters of lowlands in Ferinak for 132,000 DM, even though he knew that he had a signed pre-agreement with Urba. Niko Zorić signed a purchase agreement with Ana Crnogaj, the owner of the field, in his personal name, and not in the name of the company on 12 October 1998. He verified the agreement at a notary public, one again a family member: Jasna Zorić. Ana Crnogaj was 87 years old, and the agreement was signed as she was lying in “Sveti Duh” hospital with a broken hip on the surgery ward. She was in such a rough physical and psychological condition that she could not even sign the document herself, but verified the agreement with her right index finger print. Lawyers later disputed the agreement saying that no doctor was present during the signing- which would, based on the situation, be necessary. They also charged Niko Zorić with fraud, claming that he knew as a business partner with Urba that Ana Crnogaj had already signed a pre-agreement with him, totaling more than he offered his cousin.

The agreement that was signed in the hospital was the motive for legal procedures: Urba charged Ana Crnogaj for establishing legal ownership over the land at the Municipal Courts. The defense was not deprived of cynicism: lawyers claimed that Ana Crnogaj was in much better shape at the hospital than she was while she was at home, and that she could sign the agreement. She admitted that she was seriously ill, that she was illiterate, and that she does not see well- she can only recognize people but believed that Urba manipulated her and not those that forced her to verify the agreement with her fingerprint in the hospital.

In the mentioned documents, there is also an unofficial version of the cousin’s blackmail: “In August 1998, Frano Zorić presents Niko Zorić to Neno Barada as the person who will solve issues related to city property… Niko Zorić seeks 2.5 million DM for city consent because he has 14 players to ‘settle’… Meanwhile, Niko Zorić immediately requests a loan of 80,000 DM from his friend Galić, the director of land-registry, to settle his brother in law’s urgent debt. Barada confirms that there is no possibility of agreement on the sought after groundwork because Niko Zorić announced the price of city property and tax in the amount of 45 million kuna.”

The chronology of the affair uncovers that in January 1999, at the café Tinča, a sought after compromise between all involved actors, Frano Zorić and his cousin Niko, and Neno Barada, failed. At that meeting, Niko Zorić told Frano Zorić that he had no connection to the land anymore and that he sold it to Dragan Stupalo. He also reported that he stipulated a new meeting late at night with the new owner. Dragan Stupalo did not hide his intentions at that occasion: he explained that he was prepared to purchase the entire lot, “with compensation of 20% of the paid out total, and that he be in direct contact with Leclerc because he was willing to solve the parcel and project for them. He also informed them that he purchased the land from Niko Zorić and Damir Rubeša who are his dear friends and that he paid them 2.5 million DM. As evidence, he showed them the purchase contract, without the included price.”

Frano Zorić’s cousin claims even today that he had nothing to do with the Leclerc project and that he sold the parcel on 30 December 1998 for the same price that he bought it for- 132,000 DM. Even though reporters have documents that prove differently, screamed Niko Zorić on the telephone, he will not admit to it- the list is most likely falsified. On the key question: why did he even buy the parcel, he angrily stated: “If you really care, I wanted to plant apple trees.”

In any case, by using his name, Stupalo was able to be a player in the shadows. One letter from extensive material uncovers the plans that were created by Dragan Stupalo and his lawyer, Željko Rajačić, who exceeds the responsibility of an average legal advisor.

When Stupalo and Rajačić did not succeed in pushing away from the Urba operation, they attempted to report that Barada was a troublemaker, and openly admitted that he had his hands in dirty work. That is what is written in the letter from the attorney office Korper & Haramija to those responsible at Leclerc, after they met with Željko Rajačić on 16 November 2001.

“I don’t know exactly why, but Rajačić suggested that a meeting be held at Privredna Bank Zagreb where Leclerc, Stupalo and representatives would be present without Urba West. According to statements by the attorney, PBZ was intending to approve one more loan for Urba in the amount of 2.8 million DM, which would be directly paid to Stupalo for the purchase of the constructed portion. Stupalo would not make any problems in relation to slowing down the construction of the center in Španska.”

Apart from that, it was exhibited that Stupalo was a very distinguished and wealthy business man that was well known, that he was the victim of the Zorić-Barada conspiracy, and that he had to pay 300,000 DM in debt to Pripuz and Jelavić, who were accused in a mafia process because of the purchase from Ana Crnogaj.

Furthermore, the attorney reported that he personally had very good connections in PBZ, and that he has their utmost trust. According to his words, Urba could not get the money that was agreed on, because he revealed to his people and PBZ that Urba received ownership of the land through criminal operations and deceit. Rajačić could not explain how the entire story could possibly be related to Leclerc and how he would hide the debt in the same amount from Urba. He was completely sure that Stupalo would complete the pressure and obstruct construction as much as he could.”

Dragan Stupalo did not want to explain to Nacional’s reporter what his role in the entire affair was. He mentioned that he was the owner of the parcel for two or three years and that it seems pointless to talk about it now. Željko Rajačić met with reporters twice, and had a new story each time.

After each attempt to agree failed at Tinča, war broke out over the shopping center at all levels. It was discovered that Niko Zorić signed a Formal Decision at the Cadastre Institute on 25 November 1998 stating that he was the owner of the property. There is speculation on how Niko Zorić assisted in undermining the Leclerc project along with the fact that his daughter, Antonija, is Stjepan Galić’s secretary, the director of the Cadastre Institute, and with her help he managed to successfully lobby with Ivica Crnogaj, the grandchild of Ana Crnogaj, who also works at the Institute. This is how the criminal charges were formulated for deceit and the violation of rights against Ana Crnogaj, Niko Zorić and n.n. perpetrator at the City institute for Cadastre and Geodesic Work. The charges were raised on 18 October 1999. Attorneys claimed that “Niko Zorić is not an agriculturalist by profession, and on the foundation of that fact, concluded that it is obviously an attempt to obstruct the entire project and Urba, whom they want to bring into an unsatisfactory situation so that the mentioned property can be valued at a larger price than the price agreed upon on the pre-agreement”. The price never dropped below 2.5 million DM.

At the same time, the French were notified of the entanglement behind the land in Croatia. Just before the elections in Croatia, Leclerc and Urba had difficult relations: Leclerc threatened to cancel the agreement because of the risk of investing in Croatia. Urba decided to change the project and requested a new location permit, and on Ana Crnogaj’s parcel they planned to build a roadway instead of the building. They also transferred the responsibility for the project’s future to the city- mainly because it is under the authority of the city. It took nine more months and a transfer in government for Urba to receive a new location permit.

Leclerc had already lost their nerves, destroyed the agreement and created a new one with new rules of the game. They agreed to purchase a portion of the building, and they planned to sell the rest. It seemed that the tension lowered when the Ministry of Engineering confirmed the location permit. Project aspirers did not give up and began a procedure to stop the location permit and discredit Urba in the eyes of their financial partners.

Today Niko Zorić swears that he did not slow down the location permit that Urba sought. The documents prove otherwise and they open the question as to whether or not Niko Zorić served only as a screen to cover the tracks of Dragan Stupalo. Represented by his lawyer Rajačić, on 31 January 2000, Niko Zorić filed a complaint to the Ministry of Building Renovation, Construction, and Residence, and when they rejected the complaint, he began a Constitutional dispute in September 2000, claiming that their ownership rights over the plow field were usurpated.

In an unclear situation, Urba was able to receive a large loan from Privredna Bank Zagreb even though the total amount cannot be confirmed; despite the fact that they did not have a building permit, they began construction in June 2001 in Španska.

In July 2001, The Ministry for Environmental Protection brought about the decision to bulldoze the center in Španska, and two months later they received the conclusion for the permit to destroy the building. Urba submitted to request for a building permit in January 2002. In the meantime, inspection officers file five violations against the investors, Urba West, which resulted in the cancellation of the agreement with Leclerc. The investment ended up in French courts where Urba started a lawsuit claiming that they were responsible for the slow method of operation and the slow consignment with tenders.

When the case made it to the newspapers, Leclerc threatened to collect the bank guarantee for a loan of 16 million franks and pull out the guarantee for an additional 25 million DM. Rajačić and Stupalo did not give up easily. On 23 November 2001, they wrote a letter to Privredna Bank Zagreb in which they stated: “… We believe that it is well known that the building is under construction without a building permit. That was the reason that my client procured a legal decision on demolishing the building from the authoritative institute, and is prepared to do everything necessary, even putting media pressure on legal procedures and demolishing what has been constructed.”

Five months later, Rajačić again contacted the Executive president of PBZ, Bozo Prke, and revealed his final intention: “Because Leclerc is giving up on the mentioned operations, notably because of the tough charges filed by Urba West against Leclerc in France, it is understandable that the only remaining possibility is that the bank takes over the position of Urba West and purchases the mentioned property or that a third subject does so. If that interest does not exist, then a possible alternative is that my client guarantees the means for completing the project in coordination with the bank, in order to eliminate an array of damaging consequences.”

Only when Leclerc cancelled the agreement, did Stupalo cave in. The owner of the land that held PBZ, Leclerc, and Urba West in the palm of his hand sold the land to Ivan Dumančić, who once again sold the land to Neno Barada for €1.7 million at the end of last year, as stated by Nacional’s sources.

The Leclerc project, which has become a construction crime story, is marked by an abandoned, incomplete building at the entrance to Zagreb. The idea of a Leclerc shopping center was replaced by a commercial entertainment center with 16 movie theaters; among the interested buyers are Todorić’s Agrokor, Bauhaus, and Kaufland. Whatever happens in the end will be an ugly reminder that nothing works in Croatia. Foreigners will see it as evidence of inefficiency in corrupt Croatia which is hard to understand in developed countries, where citizens and companies protect themselves with simple legal regulations that allow property to be sold at a maximum of 30% the purchased price.