Ljubljana Mayor Janković, sons acquitted in tax evasion case

Ljubljana – Ljubljana Mayor Zoran Janković and his two sons have been acquitted of tax evasion concerning the sale of shares of the retailer Mercator in 2006 as the court handed down its ruling after a month-long trial on Tuesday. Janković said the acquittal was expected.

Janković, CEO of Mercator until 2007, was charged with tax evasion in the sale of 47,000 Mercator shares to the family company, and his sons, Jure and Damjan, were charged with abetting.

The prosecution claimed he avoided paying roughly EUR 103,000 in capital gains tax via a series of transactions involving two companies owned by his family, Electa Holding and Electa Inženiring, and a bank loan.

The prosecution claimed that Janković had control over Electa Inženiring all along and was still the owner of the shares that were only parked with the company until the sale.

Janković has maintained his innocence. The linchpin of his defence was that the Financial Administration had revoked its decision that he owes tax after conducting a second round of tax inspection, because no irregularities had been found.

During the trial, he accused the prosecutor, Blanka Žgajnar, of “bullying” him and abusing the court.

The court ended up determining that Janković had sold the shares in 2004, before the capital gains tax entered into effect, whereas in 2006 the shares were sold on by Electa Inženiring.

It therefore ruled that these were not fictitious transactions between family members and companies since everything was clear in accounting terms. “It is impossible to say that this was a fictitious transaction for tax purposes,” judge Mojca Kocjančič said.

Janković said he had expected an acquittal but described the procedure as “an encroachment of representatives of the authorities in the rights of my family.”

He described as “unfathomable” the prosecutor’s decision to proceed with the case despite the Financial Administration’s decision, saying it was “sad and ridiculous” that the prosecutor today read from the Financial Administration’s decision that had been revoked.

Žgajnar, the prosecutor, insisted that she had proved wrongdoing in the course of the trial and announced she would appeal the ruling.