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How Did A Bosnian Raspberry Farm Get A State Contract To Acquire 100 Ventilators?

F.H. Srebrena Malina (Silver Raspberry) was reportedly granted an import license for ventilators days after 80 of the expected 100 machines arrived in the Bosnian capital, Sarajevo, on April 25.
F.H. Srebrena Malina (Silver Raspberry) was reportedly granted an import license for ventilators days after 80 of the expected 100 machines arrived in the Bosnian capital, Sarajevo, on April 25.

SARAJEVO -- State prosecutors in Bosnia-Herzegovina are investigating a multimillion-dollar deal to import dozens of Chinese ventilators to fight COVID-19 as questions swirl over how a local TV presenter's raspberry farm got picked for the job.

Chief state prosecutor Gordana Tadic announced her office's leading role after a meeting in Sarajevo on May 4 with prosecutors as Bosnia's State Investigation and Protection Agency (SIPA) said it found credible indications of wrongdoing.

F.H. Srebrena Malina (Silver Raspberry), a fruit-and-vegetable grower and processor with no previous experience in medical equipment, was reportedly granted its import license for the machines weeks after signing a deal with the state and days after 80 of the expected 100 ventilators arrived in the Bosnian capital, Sarajevo, on April 25.

Srebrena Malina's owner, Fikret Hodzic -- who is a presenter on Hayat TV, a privately owned Bosnian television station -- has insisted he did nothing wrong.

"I'm proud of what Srebrena Malina did," Hodzic said last week on Instagram.

But critics say the 10.5 million convertible-mark ($5.8 million) price for 100 ventilators -- more than $50,000 each -- is far higher than it should be for the machines, even in the current global scramble for equipment to treat COVID-19 patients.

F.H. Srebrena Malina is better known for dealing in agricultural produce not medical equipment. (file photo)
F.H. Srebrena Malina is better known for dealing in agricultural produce not medical equipment. (file photo)

Moreover, the model of the 80 ventilators that arrived in late April is said to be designed for use in medical transport rather than the costlier variety normally used in hospitals, where the machines were supposed to be sent.

"I'm asking the question and I'm waiting for answers from institutions such as the federal government or the Federal Civil Protection Administration," Djanan Salcin, director of Bosnia's Public Procurement Agency, told RFE/RL's Balkan Service last week, "as to whether, when procuring respirators from domestic bidders, anyone was contacted who deals with this type of work, why someone who had to do it at all isn't doing that kind of work [and] doesn't have a license to import this kind of stuff, and those are all issues."

It is Bosnia's highest-profile procurement scandal so far in the months-old pandemic, and the accusations of profiteering from the coronavirus crisis emerged at a delicate moment in one of the Balkans' most fragile states.

Officials reported a flare-up in COVID-19 infections last week alongside an easing of restrictions in the ethnically divided Balkan country of around 3 million people, made up of a Bosniak and Croat federation along with a Serb-majority entity.

Bosnia had 1,946 officially confirmed COVID-19 cases as of May 5 resulting in 79 deaths.

Unconventional Paths

Like many governments around the world, Sarajevo has taken unconventional paths in the face of the coronavirus pandemic to procure essential medical materials, including masks, other personal protective equipment, and more sophisticated equipment.

Media reports about the April ventilator deal, including its unconventional middleman, prompted state and cantonal prosecutors to check whether Bosnian federal officials, civil-defense administrators, or Srebrena Malina broke the law.

Bosnia's division of powers and resources among the ethnically based entities that make up the country also complicates such questions.

Investigators have already asked Chinese officials to tell them who supplied Srebrena Malina with the machines, and prosecutors are likely to focus on who ultimately signed off on the deal for the state, along with its financial terms and other details.

The finger-pointing began soon after reports emerged questioning its specifics.

"It was the job of the Federal Civil Protection Administration Crisis Staff, and they had all the authority on behalf of the government of the Federation of [Bosnia-Herzegovina] to do so," the Bosnian government told RFE/RL's Balkan Service in a statement.

'Media Witch-Hunt'

The director of the Federal Civil Protection Administration, Fahrudin Solak, who was reportedly seriously injured in a motorcycle accident while en route to welcome the April 25 shipment of Chinese respirators at Sarajevo's airport, has suggested it is a media witch-hunt.

In a written statement last week addressed to Sarajevo Canton Prosecutor-General Sabina Sarajlija, Solak said that journalists have "misrepresented and conducted an inappropriate media chase against the [federal] government, the Federal Civil Protection Headquarters, and the government body managing the protection and rescue operations and the Federal Civil Protection Administration as a professional service related to the procurement of respirators for the needs of medical facilities due to the coronavirus pandemic."

Fahrudin Solak (file photo)
Fahrudin Solak (file photo)

A longtime representative within the medical-equipment sector consulted by RFE/RL's Balkan Service said the model of machine that Srebrena Malina imported is not a "serious ventilator" but rather an "emergency respirator designed primarily for transportation."

Sanita Alagic, assistant director of financial accounting and public procurement for the Federal Civil Protection Administration, did not respond after initially agreeing to answer RFE/RL's questions about the deal.

Alagic had previously stressed that Srebrena Malina was the only entity to offer to deliver the respirators by the end of April.

Numerous posts to Srebrena Malina's Facebook and other social-media pages last week accused Hodzic of corruption and urged a boycott of his food company.

Hodzic, who is the popular face of the Zvijezda Mozes Biti Ti (You, Too, Can Be A Star) musical talent show, has defended his actions and challenged others to deliver medical equipment as quickly in a crisis.

Fikret Hodzic (file photo)
Fikret Hodzic (file photo)

Via Instagram on April 29, he expressed his support for an investigation and claimed the adverse publicity is taking a toll on his business, which ordinarily sells packaged fruit, beverages, and other consumables.

"We may not be able to continue [doing business] in seven days, but it remains true that this company, from the village of Suceska, is the only one in the region that has managed to import 100 respirators in [10] days from the date of payment in [Bosnia]," he said.

Hodzic, who has touted the benefits of Srebrena Malina products for nutrition and immunity during Ramadan and in the face of the COVID-19 threat, suggested that unnamed forces behind the scandal "are determined to actually destroy what some started in '92," an apparent reference to the start of the 1992-95 Bosnian War that accompanied the breakup of Yugoslavia.

Ethnic Rivalries

Bosnia's divided state institutions are still hobbled by many of the same ethnic rivalries that fueled that bloody war over national ambitions, weakening not only effective government but also the fight against corruption at virtually all levels.

In a statement to RFE/RL's Balkan Service, the executive director of the local branch of international anti-corruption watchdog Transparency International, Ivana Korajlic, questioned a range of specifics about the Srebrena Malina deal, from "the fact that the procurement was entrusted to a company that had absolutely no references or experience in the procurement of medical equipment...and even at the time of choosing this company did not even have a license from the [Bosnian] Medicines Agency -- to the point that we were unable to obtain information on the basis of which procurement procedure was performed."

She said TI hoped the entity involved was not a "paravane for other, more serious transactions" that remain hidden.

The International Monetary Fund (IMF)'s leadership last month approved $361 million in emergency assistance to help Sarajevo meet an "urgent balance-of-payments need due to the global outbreak of the COVID-19 pandemic." That is nearly twice as much as the IMF has cleared for any other Balkan state.

Bosnia has also received more than 80 million euros ($88 million) in emergency aid for social and health care from the European Commission to fight COVID-19, as well as shipments of medical supplies and disinfectants from the NATO alliance and the Turkish government.

Responding to an RFE/RL inquiry, the U.S. Embassy in Sarajevo cited "numerous obstacles" to the anti-corruption fight in Bosnia.

In a written statement, it added: "As we have said so far, all reports of acts of corruption during the pandemic are of great concern to us. If such practices have meant the loss of public funds in the past, corruption can now lead directly to the loss of lives."

Written by Andy Heil in Prague based on reporting in Sarajevo by Aida Djugum and Edib Bajrovic of RFE/RL's Balkan Service
  • 16x9 Image

    Aida Djugum

    Aida Djugum is a correspondent in the Sarajevo bureau of RFE/RL's Balkan Service.

  • 16x9 Image

    Edib Bajrovic

    Edib Bajrovic is a correspondent in RFE/RL's Balkan Service.

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    Andy Heil

    Andy Heil is a Prague-based senior correspondent covering central and southeastern Europe and the North Caucasus, and occasionally science and the environment. Before joining RFE/RL in 2001, he was a longtime reporter and editor of business, economic, and political news in Central Europe, including for the Prague Business Journal, Reuters, Oxford Analytica, and Acquisitions Monthly, and a freelance contributor to the Christian Science Monitor, Respekt, and Tyden. 

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