We are not in the conflict of interests: What is connecting Kemal Kozarić and Jasmin Mahmuzić?

In a world of banking connections it is possible to have the wife of a member of ASA Bank’s Board of Directors, Kemal Kozarić, appointed to the key body of the FBiH Banking Agency, and at the same time to have the director of this agency, Jasmin Mahmuzić, preparing his doctoral dissertation at the School of Economics and Business under the mentorship of the former first man of the BiH Central Bank

The FBiH Banking Agency, the key regulatory body for the supervision of the FBiH banking market, had at the end of February 2022 announced a public vacancy for the selection of the members of this agency’s second-instance commission.

According to the Law on the FBiH Banking Agency this key instance represents a mechanism for adjudication of appeals filed against the first-instant decisions of the Agency. Alma Kozarić, who is the wife of Kemal Kozarić, former governor of the BIH Central Bank and a former employee of this Agency, was appointed member of this commission at the proposal of the director of the FBiH Banking Agency, which was confirmed to use in the previous responses from the FBiH Banking Agency.

Certainly, education and business related experience are not a matter of dispute for the appointment of Alma Kozarić to this Commission, but what is called into question is Jasmin Mahmuzić’s relationship with her husband Kemal Kozarić and if that relationship actually favored her appointment to the Commission.

Several sources of Tačno.net portal state that the conditions for the retirement of Alma Kozarić from the position of the director of the Sector for supervision of non-depository financial institutions of the Banking Agency of the Federation of Bosnia and Herzegovina were met in October of 2022.

“However, the director of the FBiH Banking Agency, Jasmin Mahmuzić, extended her employment contract until the end of the year, although the need for her continued engagement was questionable, given that Kozarić had already been instructed to “work from home” for some time during the corona virus pandemic, and probably spent more time in Vienna, where her husband Kemal Kozarić was appointed ambassador of Bosnia and Herzegovina, than in Sarajevo. In fact, even before becoming eligible for retirement, Alma Kozarić did not actively and fully participate in the work of the sector for which she was responsible for some time, because her work was “covered” by a manager to whom she was superior,” state our sources

When asked to comment if his relation with Jasmin Mahmuzić helped the appointment of his wife to the second-instance commission Kozarić said that his wife has worked in the banking sector for 40 years and that she was appointed to the Commission because there are not many people with her qualifications who can do that job.

“She has an auditor’s certificate. She worked as an auditor at the Raiffeisen Bank, then she managed the microcredit and leasing sector at the Agency and was one of the best students of her generation at the School of Economics and Business. Her professional engagement has always been impeccable. She was appointed to the second-instance commission by the Agency because there are only a few people with these qualifications who can do this job. I claim this categorically, although I am very subjective when it comes to Alma Kozarić. She is also appointed to the commission as an independent member. She is also a certified court expert. She was the head of the Payment Transaction Office during the war and is one of the people whom we can thank for the uninterrupted payment transactions during the war,” said Kozarić.

When I was ambassador

As SDA cadre Kemal Kozarić has held some of the most important positions in the economic sector, as well as in the BiH diplomacy. First Minister of Finance of Sarajevo Canton, Governor of the Central Bank of Bosnia and Herzegovina, dean of the School of Economics and Business, Ambassador of Bosnia and Herzegovina to Austria, and after having ended his diplomatic career he has become a member of the ASA Bank’s Board of Directors since the middle of this year.

The FBiH Banking Agency stated for Tačno.net portal that the Agency issued a Decision giving prior consent for the selection and appointment of the candidate, Mr. Kemal Kozarić, as a member of the ASA Bank’s Board of Directors for the duration of four years, starting on July 1, 2023.

With reference to his appointment to the ASA Bank’s Board of Directors, Kozarić states that he was appointed as an independent member of the Board and at the proposal of founders.

“I was part of negotiations together with the ASA Bank when they were doing some projects for the ASA Hospital, they saw my contribution and my knowledge of the banking sector and they asked me to be an independent member of the Board of Directors, Mr. Hastor and his sons specifically. I accepted it, I am only engaged at the university and I have a lot of free time to give my experience and knowledge as an independent member. The Agency gave consent to my appointment, and how is the consent given – they look at the formal conditions, whether I have qualifications, whether I have experience, what I was doing and how successful I was. I was not appointed by Mahmuzić, but by the owners and founders of ASA Bank,” emphasized Kozarić.

It has to be noted that after Russia’s is invasion of Ukraine and economic sanctions, the Sberbank AG Europa group could not continue its operations in the EU, and a significant outflow of deposits, liquidity issues, and reputational risks affected the operations of this bank’s subsidiaries in Serbia and Bosnia and Herzegovina.

In this environment, after Sberbank BH with headquarters in FBIH was taken over by the FBIH Banking Agency, the shares of this bank will be sold to ASA Finance at the beginning of March 2022. Thus, ASA Finance obtained ownership over the shares of Sberbank worth BAM 76 million for BAM 15 million, while giving BAM 0 to solve the liquidity issue. Sberbank BH solved the issue of liquidity itself by selling FBIH bonds and using ASA Bank’s deposit of BAM 100 million.

At the beginning of April last year the legal representatives of Sberbank Europe AG initiated an Appeal before the second-instance Commission of the FBIH Banking Agency against the Decision to restructure Sberbank BH.

Alma Kozarić was in fact one of the members of the second-instance commission of the FBiH Banking Agency when this appeal was rejected, bearing in mind that the tenure of the commission commenced on April 1, 2022.

Would you be my mentor

In addition to holding the position of Director of the FBiH Banking Agency, Jasmin Mahmuzić is currently a doctoral student of the Management program at the School of Economics and Business in Sarajevo, which he enrolled in 2017/2018.

Originally, he enrolled in a doctoral degree program at the University of Džemal Bijedić in Mostar at the Faculty of Economy, but he failed to submit his doctoral dissertation for evaluation within the legal deadline of five years, confirmed the faculty for Tačno.net portal .

“In accordance with Article 131, paragraph (3) of the Law on Higher Education of the Herzegovina-Neretva Canton and Article 261, paragraph (3) of the Statute of the University “Džemal Bijedić” in Mostar a deadline for obtaining the Ph.D. academic degree by defending a doctoral dissertation is defined as of September 26, 2013 according to the regulations that were valid before the entry into force of the aforementioned Law and Statute. The deadline was 5 years from the date of entry into force of the Law on Higher Education in HNC. The person in question did not submit his doctoral dissertation for evaluation within the given period, which led to the expiration of the period defined by the Law and the Statute”, read the answer of the Faculty of Economy “Džemal Bijedić”.

After “failure” at the Faculty of Economy of the University “Džemal Bijedić”, Mahmuzić takes the exams at the School of Economics and Business in Sarajevo and turns in the topic of his doctoral dissertation.

By coincidence, one of the supervisors for the selection of doctoral dissertation topic, as well as a member of the Commission, was Kemal Kozarić, a tenured professor at this School, but also its former dean.

Mahmuzić and Kozarić had, together with two other co-authors (Dr. Emina Žunić Dželihodžić, Dr. Nikola Fabris) published the book “Banking Management” in 2021.

When talking about his relationship with Jasmin Mahmuzić for Tačno.net portal Kemal Kozarić pointed out that he knew Mahmuzić from the time when he was the governor in the Central Bank and that they only cooperated on professional terms.

When it comes to mentoring for the preparation of doctoral dissertation, Kozarić points out that he works at the Banking Department and that he is the only one who teaches Banking besides a retired professor, who cannot be a mentor because he is retired, and professor Karamujić, and that his mentorship was logical because the topic is banking and supervision.

“He has been working on that dissertation for five years and made a presentation of the project where the commission, not me alone, had made some suggestions and asked him to refine the working version a bit more, but he still has not submitted the new working version, as set forth by the procedure. I am going to retire next year and the question is whether I will see him go through his doctoral dissertation. It takes time and effort for him to do it in accordance with the standards assumed by the School of Economics, and the defense of the doctoral thesis itself is public”, explains Kozarić.

He states that in case Mahmuzić does not finish his doctoral dissertation before his retirement next year, he can no longer be his mentor and that he will get a substitute mentor.

Who are your sources?

In response to Tačno.net’s inquiry to the director of the FBiH Banking Agency, Jasmin Mahmuzić, about allegations that his ties with Kemal Kozarić were reflected in positioning of his wife Alma Kozarić as a member of the Banking Agency’s second-instance commission, the Banking Agency has asked Tačno.net portal to discover its sources.

We remind the FBiH Banking Agency of the domestic legal legislation that it is journalist’s right not to reveal the sources, and as such it represents an integral part of the right to information.

Considering this information, the director of the FBiH Banking Agency, Jasmin Mahmuzić, did not submit answers to the questions of the Tačno.net portal by the time this text was published.

If the director of the Agency changes his mind and responds to the Tačno.net portal’s inquiry, we will be more than happy to publish the answers.