This goes some way into explaining why the UK government so strongly opposed military action against the Serbs between 1992 and 1995, and let hundreds of thousands of Bosnian Muslims be slaughtered by the Serbs.
Hurd’s telecom privatisation unravels
A controversial privatisation arranged by the sometime British foreign secretary Lord Hurd with Slobodan Milosevic unravelled yesterday when the Serbian government said it was buying back a hefty share of its national telecommunications network from Italy.
The Serbian prime minister, Zoran Djindjic, said Belgrade was buying back the 29% stake in Telekom Serbia sold to Telecom Italia in 1997 in a deal mediated by Lord Hurd, then deputy chairman of NatWest Markets. Although there has never been any suggestion of impropriety on Lord Hurd’s part, the deal attracted fierce criticism. It presented Mr Milosevic with a $1bn (£625m) windfall a year before his campaign to drive Kosovan Albanians from their homes and at a time when as Serbian leader he was facing down huge protest demonstrations in Belgrade. For years before that Lord Hurd had been accused of steering a pro-Serb policy throughout the Balkan crisis.
Mr Djindjic indicated yesterday that the 1997 part privatisation, which sold 49% of Telekom Serbia to Italian and Greek companies, was improper. “Certain persons will be implicated, both in Italy and this country,” he said. Italian magistrates have been investigating the matter for more than a year and the Italian parliament has set up an inquiry into claims that bribes were paid to secure the deal and that tens of millions of the proceeds went into bank accounts controlled by key figures in the Milosevic regime. Lord Hurd joined NatWest Markets after stepping down as foreign secretary in 1995. He was accompanied by Dame Pauline Neville-Jones, a former senior diplomat in international talks to end the Yugoslav crisis in the mid-1990s. Both had meetings with Mr Milosevic in Belgrade in 1996 on Serbia’s foreign debt and the privatisation of state assets. At the time the Italian embassy in Belgrade warned its government that the telecom deal would give Mr Milosevic a “salvage anchor”. Senior Serbians claim that the deal was “non-transparent”, that exorbitant fees were paid to NatWest Markets, and that the proceeds were diverted to Mr Milosevic’s cronies. Mr Djindjic said yesterday that the buy-back was the “deal of the year”, as Telecom Italia had agreed to sell its 29% share for 40% of what it paid.