Justice Minister Dominika Švarc Pipan has come under fire after it transpired that she signed a deal to acquire a dilapidated building for several courts in Ljubljana for more than four-fold as much as the seller paid for it. The opposition has announced a motion of no confidence in the minister over the matter.

The controversial €7.7 million contract, signed at the end of December, is being scrutinised by the National Bureau of Investigation for potential irregularities and has received wide media coverage with ever more contentious details coming to light in recent days.

One of the issues is that the Justice Ministry failed to commission its own price appraisal, but went along with the one provided by the seller, and allegedly substantially overpaid the property.

Businessman Sebastijan Vežnaver bought the property from a bankruptcy estate for €1.7 million in 2019 after it had been appraised in 2017 at €2.9 million.

The office building is located on Litijska Road in east Ljubljana and has been standing unused for years. It is dilapidated, the outer shell is peeling off and it is overgrown with weeds. It will need significant investment to bring it up to standard.

Questionable appraisals

Media have revealed that a subsequent appraisal provided by the seller for the purpose of selling the property to the ministry was not carried out by the appraiser who signed his name on the contract but by the same appraiser who made the original, €2.9 million valuation in 2017.

The two appraisals also differ in assessment of the size of the property, which apparently has less usable area that what is specified in the contract.

When the revelations were made last week, the minister said the contract would be annulled if the irregularities turned out to be true.

The ministry has now signed an annex under which a new official appraisal of the total building area will be made before the ministry takes formal possession, and if the area turns out to be lower than specified in the contract, the total price is to be reduced accordingly.

Speedy transfer of money

Another unusual aspect of the deal is that the ministry transferred the money to the seller on 29 December, during the holiday period and just a day after the contract was signed.

Rajko Pirnat, a professor of administrative law, told public broadcaster RTV Slovenija on 17 January that this was "very surprising" since the state typically has much longer payment terms.

He said the purchase contract was very short, just four pages long, and looks like an online template that someone adjusted slightly. It has no special safeguards with the exception of the anti-corruption clause that all such contracts involving the state must entail, he said.

Coalition expects explanations

The opposition Democrats (SDS) announced on 17 January they would file a motion of no confidence in the minister over the contentious deal, which they indicated was just one of the reasons.

MP Dejan Kaloh said the Justice Ministry had not acted with due care and ignored the law under which the actual value of the property being bought must be checked.

Speaking of "blatant irregularities", he pointed to a tender for digitalisation of notary services, which the National Review Commission annulled over the ministry's failure to properly evaluate the credentials of a group of bidders.

Švarc Pipan would not comment on the motion, but the coalition partners said they expected her to provide explanations for the allegations, and to honour her promise to "annul the contract if the purchase of the court building turns out to have been a fraud".

The other opposition party, New Slovenia (NSi) indicated it will not support the minister in the vote, but the two parties have only 35 seats in the 90-strong National Assembly between them, far less than the required 46 for the motion to succeed.