{"id":33696,"date":"2021-10-06T19:29:00","date_gmt":"2021-10-06T19:29:00","guid":{"rendered":"https:\/\/ostro.si\/?p=33696"},"modified":"2026-06-02T12:15:27","modified_gmt":"2026-06-02T12:15:27","slug":"a-tale-of-two-brothers-and-a-croatian-island","status":"publish","type":"post","link":"https:\/\/ostro.si\/en\/stories\/pandora-papers\/a-tale-of-two-brothers-and-a-croatian-island\/","title":{"rendered":"A Tale of Two Brothers and A Croatian Island"},"content":{"rendered":"
\n

Anu\u0161ka Deli\u0107, Ma\u0161enjka Ba\u010di\u0107, Dmitry Velikovsky (IStories)<\/strong><\/p>\n

\u2014<\/em><\/p>\n

New documents reveal the true extent of involvement of the Peren\u010devi\u0107 brothers in the leading tourism developer on the Croatian island of Lo\u0161inj, the Russian pipeline constructor Velesstroy, and other lucrative investments.<\/em><\/p>\n<\/div>\n

\"
Ilustration: Dubravko Matakovi\u0107<\/figcaption><\/figure>\n
\n

In March 2015 a Swiss lawyer wrote to staff at Asiaciti Trust, a Hong Kong-based corporate services provider, as he sought to set up a trust for Predrag Peren\u010devi\u0107, a Croat residing in Russia. <\/p>\n

 The lawyer, Luis Arias, wanted to confirm that no corporation tax would be paid on profits generated outside Hong Kong, because some of the trust\u2019s funds would come from the \u201cbonuses [Peren\u010devi\u0107] receives from the companies he manages.\u201d <\/p>\n

 Peren\u010devi\u0107, Arias wrote, wanted to move his bonuses into the trust and transfer the money \u201cdown the chain of companies until it reaches the intended recipient,\u201d with minimal delays and paperwork.<\/p>\n

 Peren\u010devi\u0107 was a deputy director of Velesstroy, a Russian pipeline company led by his brother Mihajlo, a wealthy but mysterious businessman with close ties to Russia. Mihajlo is designated as a politically exposed person (PEP), partly due to his closeness to Russian President Vladimir Putin. <\/p>\n

 Little is known about how Mihajlo Peren\u010devi\u0107 made his fortune. Today much of his wealth comes from Russia, where his company has lucrative contracts to supply the state oil transport monopoly, Transneft. A 2020 investigation by OCCRP and O\u0161tro found his family and associates received millions of dollars from Russia for seemingly fictitious real estate purchases,<\/span><\/a> raising suspicions they were a tool for laundering money through Croatian property. <\/p>\n

 Despite the seemingly clear family connection between the Peren\u010devi\u0107 brothers, and Mihajlo\u2019s status as a PEP, Asiaciti carried out Arias\u2019s instructions and set up PNP Trust in 2015. By 2019 the trust controlled at least 650 million euros of assets. <\/p>\n

 Emails and documents from the Pandora Papers<\/a> \u2014 a massive leak to the International Consortium of Investigative Journalists of documents from 14 offshore service providers, shared with media partners around the world including O\u0161tro and OCCRP \u2014 shed new light on the Peren\u010devi\u0107 brothers\u2019 secret acquisition of hotels and restaurants on the Croatian island Lo\u0161inj. <\/p>\n<\/div>\n

\"\"<\/p>\n

\n

The leaked documents also reveal how Arias and the Peren\u010devi\u0107 family dodged questions about the real owner of the trust.<\/p>\n

 Yet by 2017, staff at Asiaciti had begun to suspect that Mihajlo was secretly behind PNP Trust. In a leaked email from August 2017, the lawyer Arias wrote to Nikola Peren\u010devi\u0107 \u2014 Mihajlo\u2019s son and the investment manager of PNP Trust \u2014 to transmit a banking compliance question about whether Mihajlo was \u201ca family member of the Settlor.\u201d <\/p>\n

 Nikola brushed off the query, pouring scorn on a media report referenced by the bank\u2019s compliance department. Yet a year later, and following a suspicious multi-million-euro transfer forced through by PNP Trust, Asiaciti had dropped Pedrag Peren\u010devi\u0107 as a client and filed an official Suspicious Activity Report to Hong Kong regulators. <\/p>\n

Experts say that trusts are particularly opaque vehicles that can be used to hide the real owners of assets. For over five years, the population of Lo\u0161inj has remained in the dark about who owns Jadranka, and with it around 250 million euros of luxury properties on the island. <\/p>\n

 When someone puts an asset in a trust, he or she no longer technically owns it, but can enjoy all the benefits of it.<\/p>\n

 “It creates a barrier between the person and that asset – they’re no longer the legal owner of that asset and that creates a secrecy barrier very easily,” said Nicholas Shaxson, writer and researcher with the Tax Justice Network.<\/p>\n

 “Trust agreements are in a metal safe: No one except the settler and trustee knows about them,” said Ilya Shumanov, director of Transparency International Russia. <\/p>\n

 Tax experts also warned that the trust might be used to avoid paying tax in both Russia and Hong Kong, especially if a trust is led by a proxy for the real owner of assets and funds.<\/p>\n

 \u201cIt\u2019s perfectly legal to set up a Hong Kong trust from Russia, and if the income was taxed in Russia there is no problem,\u201d said Alexander Zakharov, partner at Paragon Advice Group. \u201cBut if this is someone setting up a trust and making themselves the beneficiary, but they are a proxy for someone else, that could be a problem. <\/p>\n

 \u201cIn general, setting up a trust abroad to look after your assets is … quite common in Russia over the last 20 years. But if there is a politically-connected person involved, someone with influence with people in the state, it could raise some suspicion. This could be a red flag for anti-money laundering teams in banks or for enforcement,\u201d Zakharov added. <\/p>\n<\/div>\n

\"
Russian President Vladimir Putin in conversation with two Velesstroy officials. Photo: Instagram<\/figcaption><\/figure>\n
\n

Funding Questions<\/h3>\n

\u201cCan someone please reply???\u201d wrote Nikola Peren\u010devi\u0107 in a November 2018 email to Asiaciti. \u201cIt has been 20 days since you received the original mail from the bank. It is absolutely urgent now, so I ask you kindly to reply.\u201d <\/p>\n

 He was already frustrated with the time Asiaciti had taken to open a bank account for PNP Trust at the Hong Kong offices of Julius Baer, a Swiss private banking firm, and now it was dragging its heels about opening another in Austria.<\/p>\n

 Earlier in 2018, Julius Baer\u2019s compliance department had also caused months of delays to a 3.1-million-euro transfer from PNP Overseas, one of PNP Trust\u2019s companies, to a Croatian real-estate developer in which it held an indirect stake, Jadranka. <\/p>\n

 The attempt to force through this transfer set off a chain of events that ended with Asiaciti resigning as PNP Trust\u2019s registrar. <\/p>\n

Russian President Vladimir Putin in conversation with two Velesstroy officials. Photo: Instagram <\/p>\n

 Prior to this, though, the leaked documents show tens of millions of euros transferred to and between companies owned by PNP Trust in 2018 alone. <\/p>\n

 Predrag Peren\u010devi\u0107 added close to 10 million euros into the trust in 2017. More than a half constituted a “bonus payment from Velesstroy to Peren\u010devi\u0107.\u201d <\/p>\n

 Peren\u010devi\u0107 was also earning outsized bonuses from the pipeline company led by his brother \u2014 bonuses his lawyerArias had said he wanted to transfer to the trust. In an income statement later sent to Asiaciti, Peren\u010devi\u0107 reported Velesstroy had paid him the equivalent of around 114,900 euros in salary between April 2014 and mid-2017 and bonuses for the period totalling a whopping 26 million euros. <\/p>\n

 The source and sheer size of Peren\u010devi\u0107\u2019s bonuses flowing into PNP Trust should have caused concern for Asiaciti\u2019s compliance department, Transparency International\u2019s Shumanov said: \u201cIf bonuses have been transferred to a PEP’s relative who works in the company and moved offshore, it could be identified as a red flag.\u201d<\/p>\n

 Shumanov said Velesstroy’s reliance on contracts from Russia’s state-run company was also problematic, given Mihajlo Peren\u010devi\u0107’s known closeness to the Russian government.<\/p>\n

 Mihajlo Peren\u010devi\u0107 has a reputation as an influential operator on the Croatian island Lo\u0161inj, where he, his wife, and brother own villas and land in \u010cikat bay, on the western coast of the island. <\/p>\n<\/div>\n

\"
Luxury Hotels in \u010cikat Bay, on the Croatian island of Losinj.Photo: Marco Secchi \/ Alamy Stock Photo<\/figcaption><\/figure>\n
\n

The picturesque bay, touted in tourist guides for its undulating coastline, has gained a reputation as a haven for Russian money. Peren\u010devi\u0107 claims to have attracted millions of dollars from Russia to Lo\u0161inj, where activists have dubbed him the \u2018gubernator,\u2019 the Russian word for \u2018governor.\u2019  <\/p>\n

 Jadranka is also well-known as Lo\u0161inj\u2019s top real estate developer, with restaurants, villas and hotels across the island, including its first five-star resort, Hotel Bellevue. For years it was thought to be owned by Russians, after a management company belonging to the Russian bank Promsvyazbank took a controlling stake in 2013. <\/p>\n

 At the time, some wondered if Peren\u010devi\u0107 may also have been involved because of his wealth and Russian connections. Asked by a Croatian media outlet if he was behind the Jadranka deal, Peren\u010devi\u0107 replied cryptically that his money was not, but his influence was.  <\/p>\n

 That was not entirely true. Documents unearthed via the Pandora Papers show the management company, UK Promsvyaz, was actually working on behalf of offshore companies partly controlled by the Peren\u010devi\u0107s.   <\/p>\n

 In 2015, the Croatian developer was then consolidated under PNP Trust, which would later add several other companies to its holdings, including various offshore companies and Velesstroy.<\/p>\n

 Mihajlo\u2019s name does not appear on any of the leaked paperwork for the trust, but there are hints of the elusive tycoon\u2019s involvement. <\/p>\n

 An email from the leak, sent by the family\u2019s lawyer in 2017, asks Asiaciti to remove Predrag\u2019s name as the beneficiary of the trust and replace it with a description of a \u201cdesignated class of beneficiaries.\u201d<\/p>\n

 Initially, that \u201cclass\u201d was described as \u201cmale descendants of the settlor [Predrag Peren\u010devi\u0107] and\/or other male family members of the Peren\u010devi\u0107 Family as nominated.\u201d This meant only Nikola or Mihajlo could take over if Predrag died. <\/p>\n

 The wording was changed again in March 2018. This time the \u201cclass\u201d included \u201cany male beneficiary descending from the Original Settlor\u2019s father, born to a legal matrimony and fully and legally entitled to bear the Peren\u010devi\u0107 name.\u201d  <\/p>\n

 This could only be Mihajlo. <\/p>\n

 Lakshmi Kumar, Policy Director at Washington, DC-based non-profit Global Financial Integrity indicated the changes could have been intended to make it unclear who truly owned the trust.<\/p>\n

 “A trust allows you to create vague enough language that would help obscure identity. The real owners of assets can hide behind a trust because it provides anonymity and it is often hard to determine who is the real owner,\u201d she said. \u201cExamining the relationship between the settlor and beneficiary provides vital information on who truly owns and controls the assets held by the trust.\u201d <\/p>\n

 The maneuver coincided with the introduction of a new tax treaty between Russia and Hong Kong, which tax analyst Zakharov said would make it much harder to move assets between the countries to avoid paying any tax.<\/p>\n

 \u201cWhen the double tax treaty was signed and came into effect, it became more difficult to hide anything from Russia,\u201d he said. \u201cThere are now requests [for information] from Russia to Hong Kong, and Hong Kong has been providing responses.\u201d <\/p>\n

 In February 2018, Arias emailed Asiaciti to warn that PNP Overseas was due to receive dividends through Waveform\u2019s Russian office. To comply with the new treaty, PNP Overseas needed a certificate to show it was resident in Hong Kong and not an offshore company. <\/p>\n

 But PNP Overseas couldn\u2019t meet the criteria. An audit by Ernst & Young\u2019s Hong Kong office found it had no business income in its first year, it had nothing in its local bank account, and no physical presence in Hong Kong.   <\/p>\n

 Zakharov said that a trust having no bank account or substantial economic presence in its jurisdiction was one sign that it had been set up purely for tax purposes.<\/p>\n

 Following further banking compliance questions from other parties about the identity of PNP Trust’s ultimate beneficiary, the “class” was abandoned and Predrag reinstated as the primary beneficiary.<\/p>\n<\/div>\n

\n

\n\u201c<\/span>Trust agreements are in a metal safe: No one except the settler and trustee knows about them
\n\u201d<\/span>\n<\/p><\/blockquote>\n

\u2014 Ilya Shumanov, director of Transparency International Russia<\/figcaption><\/figure>\n
\n

 Fire Alarm<\/h3>\n

 While PNP Overseas was vainly seeking residential status in Hong Kong, Velesstroy\u2019s holding company granted it a dividend payment of 3.1 million euros. <\/p>\n

 PNP Overseas wanted its bankers at Julius Baer to transfer the money to the Croatian company Jadranka via its indirect owner, a British Virgin Islands company called Montex Assets. This is when alarm bells sounded in the bank\u2019s compliance department, which demanded to know more about the transfer. <\/p>\n

 The banker was surprised to see the client \u201cremit another sum so frequently\u201d given its account was meant to \u201cinvest in bonds, funds or structure portfolios.\u201d Julius Baer also wanted to know why the dividend was to be paid via PNP Overseas, instead of directly to Montex Assets. <\/p>\n

 Arias replied the client \u201cis conscious he is asking the bank to make an exception and would like to reassure the bank that it will remain an exception.\u201d<\/p>\n

 As Julius Baer\u2019s compliance team demanded more information, PNP Trust\u2019s representatives changed their explanation. Now, they claimed the money was needed to renovate the \u201cmarquee restaurant\u201d of Jadranka\u2019s Hotel Bellevue, which had been damaged in a fire in April 2018. <\/p>\n

However an official report from the local fire department shows that less than 27,000 euros of damage was done. The document, obtained by O\u0161tro, shows that the fire burned in a subterranean storage room and auxiliary kitchen spaces \u2014 not in direct proximity to the hotel\u2019s marquee restaurant \u2014 and was put out in less than two hours.  <\/p>\n

Despite the bank\u2019s reservations, the money was eventually transferred as an interest-free loan to Jadranka\u2019s indirect shareholder, Montex Assets, to \u201csimplify compliance issues\u201d.<\/p>\n<\/div>\n

\"
A picture of the damage to the subterranean storage room and auxiliary kitchen at the Bellevue Hotel, which Nikola Peren\u010devi\u0107 sent to Asiaciti. Pandora Papers<\/figcaption><\/figure>\n
\n

 Burned Bridges<\/h3>\n

 By now, however, Julius Baer\u2019s compliance department had delved into the Peren\u010devi\u0107 family\u2019s links to the Kremlin. It subsequently upgraded PNP Overseas\u2019 rating to high risk, and communicated its findings to Asiaciti. <\/p>\n

 Asiaciti resigned as the trust\u2019s registrar. <\/p>\n

 In February 2019  \u2014 after staff concluded Mihajlo Peren\u010devic was likely \u201cthe [trust\u2019s] \u201ceffective controller based on the… internet searches\u201d that included a years-old OCCRP story<\/span><\/a> \u2014 Asiaciti filed the suspicious transaction report with Hong Kong\u2019s Financial Intelligence Unit. <\/p>\n

 Hong Kong authorities declined to comment for confidentiality reasons. A spokesperson for Julius Baer also declined to comment. <\/p>\n

 Emails between Asiaciti staff who put together the report show the provider had failed to carry out basic due diligence checks on Mihajlo Peren\u010devi\u0107.<\/p>\n

 When staff asked colleagues for documentation on him, they were told: “We do not have client due diligence documents on the identified effective controller. Thank you.” <\/p>\n

 PNP Trust still exists, but with a different registrar. It may also be using a different bank. <\/p>\n

 “Please ask the Trustee to liquidate the account and to return the funds to the BO [beneficial owner],\u201d Nikola Peren\u010devi\u0107 wrote in a fuming May 2018 email to the Swiss lawyer Arias about the delays to the 3.1 million euro transfer. <\/p>\n

 \u201cThe time for patience is over. Business waits for no man, and so neither does it wait for the compliance officers.\u201d<\/p>\n<\/div>\n

\n

\"\"<\/p>\n

\n
\n

Do you have information or documents relevant to the understanding of the reported subject?<\/a><\/p>\n

You can safely send them through our whistleblowing platform zvizgac.si.<\/a><\/p>\n<\/blockquote>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

New documents reveal the true extent of involvement of the Peren\u010devi\u0107 brothers in the leading tourism developer on the Croatian island of Lo\u0161inj, the Russian pipeline constructor Velesstroy, and other lucrative investments.<\/p>\n","protected":false},"author":1,"featured_media":27753,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","page_custom_class":"","post_show_featured_image":"1","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[3355],"tags":[3461,3460,3396,3462,3414,3415,3456],"class_list":["post-33696","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pandora-papers","tag-croatia-2","tag-documents-2","tag-icij","tag-mihajlo-perencevic","tag-pandora-papers","tag-pandorini-dokumenti","tag-tax-evasion-2"],"acf":[],"taxonomy_info":{"category":[{"value":3355,"label":"Pandora Papers"}],"post_tag":[{"value":3461,"label":"Croatia"},{"value":3460,"label":"documents"},{"value":3396,"label":"ICIJ"},{"value":3462,"label":"Mihajlo Peren\u010devi\u0107"},{"value":3414,"label":"Pandora papers"},{"value":3415,"label":"Pandorini dokumenti"},{"value":3456,"label":"tax evasion"}]},"featured_image_src_large":["https:\/\/ostro.si\/wp-content\/uploads\/2021\/10\/PricCC8Ca1-3-1024x807.webp",1024,807,true],"author_info":{"display_name":"wpm","author_link":"https:\/\/ostro.si\/en\/author\/wpm\/"},"comment_info":0,"category_info":[{"term_id":3355,"name":"Pandora Papers","slug":"pandora-papers","term_group":0,"term_taxonomy_id":3355,"taxonomy":"category","description":"","parent":3360,"count":10,"filter":"raw","cat_ID":3355,"category_count":10,"category_description":"","cat_name":"Pandora Papers","category_nicename":"pandora-papers","category_parent":3360}],"tag_info":[{"term_id":3461,"name":"Croatia","slug":"croatia-2","term_group":0,"term_taxonomy_id":3461,"taxonomy":"post_tag","description":"","parent":0,"count":1,"filter":"raw"},{"term_id":3460,"name":"documents","slug":"documents-2","term_group":0,"term_taxonomy_id":3460,"taxonomy":"post_tag","description":"","parent":0,"count":1,"filter":"raw"},{"term_id":3396,"name":"ICIJ","slug":"icij","term_group":0,"term_taxonomy_id":3396,"taxonomy":"post_tag","description":"","parent":0,"count":10,"filter":"raw"},{"term_id":3462,"name":"Mihajlo Peren\u010devi\u0107","slug":"mihajlo-perencevic","term_group":0,"term_taxonomy_id":3462,"taxonomy":"post_tag","description":"","parent":0,"count":1,"filter":"raw"},{"term_id":3414,"name":"Pandora papers","slug":"pandora-papers","term_group":0,"term_taxonomy_id":3414,"taxonomy":"post_tag","description":"","parent":0,"count":8,"filter":"raw"},{"term_id":3415,"name":"Pandorini dokumenti","slug":"pandorini-dokumenti","term_group":0,"term_taxonomy_id":3415,"taxonomy":"post_tag","description":"","parent":0,"count":8,"filter":"raw"},{"term_id":3456,"name":"tax evasion","slug":"tax-evasion-2","term_group":0,"term_taxonomy_id":3456,"taxonomy":"post_tag","description":"","parent":0,"count":3,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/posts\/33696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/comments?post=33696"}],"version-history":[{"count":1,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/posts\/33696\/revisions"}],"predecessor-version":[{"id":33698,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/posts\/33696\/revisions\/33698"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/media\/27753"}],"wp:attachment":[{"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/media?parent=33696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/categories?post=33696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ostro.si\/en\/wp-json\/wp\/v2\/tags?post=33696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}