Slovenian Bazaar
The Slovenian company Riko has been operating in Belarus for decades, earning hundreds of millions of euros in government contracts. In 2024, Riko became embroiled in a corruption scandal – its representatives bribed Deputy Energy Minister Mikhail Mikhadziuk, who ended up in the dock. At the same time, there appears to have been no punishment for the bribe givers.
This investigation will reveal what Riko does in Belarus, who is behind it, and how the Slovenian company is linked to Aleksandr Lukashenko’s family.
CORRUPT OFFICIAL TRIAL
“I give you a substation, you modernise it, but you give me a bribe. Tens of thousands of dollars". That’s how Aleksandr Lukashenko explained the criminal case of Mikhail Mikhadziuk, who used to be the deputy head of the Ministry of Energy, back in June 2024.
Mikhail Mikhadziuk in court. Source: belta.by
Deputy Energy Minister Mikhail Mikhadziuk was sacked at the end of December 2023. He had served in this position for 18 years, heading the Department of Nuclear Energy and overseeing issues related to the Belarusian NPP, among other things.
During the trial, it emerged that Mikhail Mikhadziuk was accused of receiving 35,000 euros from Riko between September 2022 and December 2023 in exchange for the company being selected as the contractor for the construction and modernisation of high-voltage substations in Belarus. Mikhadziuk spent some of the bribe money on medical treatment for himself and his sister and repairing his parents’ house.
The Investigative Committee opened a criminal case on January 26, 2024, just one month after the deputy minister’s resignation.
At the trial, Mikhadziuk fully admitted his guilt. He repaid the bribe in full and donated 5,000 Belarusian rubles to the National Scientific and Practical Centre for Paediatric Oncology, Haematology, and Immunology. However, he was still sentenced to six years of imprisonment and fined 11,200 euros. The amnesty reduced his sentence by one year.
What about the company representative who bribed the high-ranking official? At the trial, a witness testified that the Slovenian company Riko had arranged to meet Mikhadziuk. During the trial, it emerged that the company representative who met with the official was outside Belarus. He was not named in the press.
Lawyers interviewed by Buro believe that the businessman who bribed Mikhadziuk should also have been punished by law.
“His [the company representative’s] actions have elements of a crime, and theoretically, he could have been subject to prosecution for bribery”, one of the lawyers said.
Who is the mysterious “company representative” who arranged the meeting and paid the bribe? There is reason to suspect that it is Živorad Smiljković, the head of Riko’s Belarusian representation. And here’s why.
Živorad Smiljković (second from the right wearing glasses). Source: riko.si
We know that Riko representatives initiated the meeting thanks to press coverage of the trial. It turns out that one of the company’s employees lived next door to Mikhadziuk – same entry section of a riser block of flats, but several floors up. He met the then-official in an elevator. He talked about it at work, and his manager asked him to arrange a meeting with the “neighbour”. The head of Riko’s representative office in Belarus then was Živorad Smiljković.
The deputy energy minister and the businessman met in the official’s apartment. Smiljković’s personal driver drove him to the location.
Živorad’s relatives could organise for him to meet the official. Živorad’s daughter-in-law Daria lives next door to Mikhadziuk. Her husband, Milutin, works with his father at Riko.
We have reached Daria Smiljković. She said she had no knowledge of the criminal case against Mikhail Mikhadziuk and had no recollection of such a person living in her entry section.
We tried to contact Živorad Smiljković. He was the head of Riko’s representative office in Belarus when the bribes were paid to Mikhadziuk. But talking to him was not easy – the businessman was either in or headed to a meeting. His deputy flatly refused to comment on whether Riko was responsible for the bribery of Belarus’s deputy energy minister.
The Prosecutor General’s Office and the Investigative Committee did not reply to our request for information on this matter
The Slovenian company Riko stated that it is aware of Mikhail Mikhadziuk’s criminal case, but it has had no impact on its operations in Belarus.
“The official criminal and judicial authorities of Belarus have closed the case mentioned above, which in no way encumbers Riko, its representative office, its employees, or its activities”, Riko wrote in response to an inquiry from our colleagues at the Slovenian publication Oštro.
So, who or what has allowed a Slovenian company to be so firmly entrenched in the Belarusian market that its representatives can bribe officials with impunity?
SLOVENIANS IN THE CITY
The Slovenian company Riko has been active in Belarus for several decades, supplying factory equipment and building and reconstructing energy infrastructure. We counted at least eleven substations built or remodelled by this company across the country. Among other things, Riko modernised the Belorusskaya substation to commission the BelNPP.
The company actively supplies equipment and creates various mechanisation and production lines for Belarusian state and private enterprises. Its clients include the state-owned Minsk Automobile Plant (MAZ), the Minsk Wheeled Tractor Plant (MZKT), the Minsk Tractor Plant (MTZ), Gomselmash and the private companies Santa Bremor, Savushkin Produkt and others.
In March 2017, Riko won a contract for the reconstruction of a substation in Minsk (first from the left – Riko co-owner Janez Škrabec, second from the left – head of Riko’s representative office in Belarus Živorad Smiljković, fourth from the left – Deputy Minister of Energy of Belarus Mikhail Mikhadziuk). Source: riko.si
In 2020, journalists noted that Riko had concluded deals in Belarus worth more than €310 million in ten years.
So, who is managing this asset? Serbian citizen Živorad Smiljković heads the representative office in Belarus. His whole family worked at Riko: his wife Marina, their son Milutin and Milutin’s wife Daria.
We did some digging and discovered how much the Smiljković family makes at Riko. In 2023, each member had an accrued salary before tax deduction of at least 9,000 Belarusian rubles a month.
Milutin Smiljković has a flat in Minsk, in a new building in Bahdanovich Street. He is married to a Belarusian woman, Daria Smiljković (maiden name Harastsiuk). She owns one more apartment on Dziarzhynski Avenue.
In addition to his work at Riko, Živorad’s son Milutin was also in business with Lukashenko’s “moneybag”, Alexander Zaitsev. They jointly owned SM Industrial Engineering from 2013 to 2019.
Milutin also conducted business with Ivan Smolski, a former member of Lukashenko’s security service and executive director of the Presidential Sports Club, headed by Dzmitry Lukashenko. Their company, Verified, planned to provide export engineering services. What exactly the company was doing is not known. It was liquidated in 2023.
But not only business connects the Smiljkovićes to Lukashenko’s family. We have evidence that Živorad and Milutin were on holiday with Dzmitry and Hanna Lukashenko’s family on several occasions.
SHARED VACATION
In July 2017, Dzmitry, Hanna Lukashenko, and their entire family returned from a nearly month-long holiday in Sardinia on a private business jet. Živorad Smiljković and his wife Marina accompanied them.
Hanna Lukashenko celebrated her birthday in Sardinia on July 2. We do not know if the Smiljković family was present at the celebrations. Still, they flew out of Belarus just a few days before the ceremony and returned together with Hanna and Dzmitry Lukashenkos.
Hanna and Dzmitry Lukashenkos are celebrating New Year’s Eve. Source: belta.by
In March 2017, Živorad’s son, Milutin Smiljković, travelled to Ljubljana with Dzmitry and Hanna Lukashenko on the Lukashenko family business jet.
In 2019, Živorad and Milutin travelled on a business jet with Hanna and Dzmitry Lukashenko after a holiday in the Swiss town of Sion, near the renowned ski resort of Crans-Montana. Živorad Smiljković initially travelled there alone with the family of Lukashenko’s son, and two weeks later, they returned to Minsk with Milutin on board.
Milutin Smiljković refused to comment on shared flights with Dzmitry Lukashenko and joint business with his aide Ivan Smolski.
“I don’t want to talk. That’s my right”, Milutin Smiljković told Buro.
However, the links between Riko and its employees and Lukashenko’s family do not end there.
GLASS SCRAPER
Janez Škrabec, who co-owns Riko, is believed to have known Aleksandr Lukashenko for a long time. However, he does not admit it, saying he has only met Lukashenko at a protocol event.
The press wrote that Škrabec went skiing with Lukashenka during the latter’s brief “visit” to Slovenia in 2004, which was kept secret by then-press secretary Natallia Piatkevich. Slovenian foreign ministry spokesman Rok Sarkr confirmed that Lukashenko was in Slovenia but said it was a private visit.
The official report stated that “during the visit Lukashenko had meetings with prominent political figures and representatives of big business". Lukashenko returned from Slovenia on his presidential plane with Živorad Smiljković. It may or may not have been a coincidence, but after that visit to Slovenia, Riko started supplying equipment to MAZ, BelAZ, and the Minsk Tractor Plant. By the end of 2004, trade turnover between Belarus and Slovenia had increased by 17.2% compared to 2003, amounting to $39.5 million.
Project after project, Riko expanded its presence in Belarus. In January 2011, Škrabec tried to set up a joint business with “arms baron” Vladimir Peftiev. The Belenergoatom company was registered. However, in June 2011, Peftiev was hit with EU sanctions. The company went into liquidation in 2012.
This is not the only story involving sanctions, Riko and Škrabec. In February 2012, the European Union imposed additional restrictions on Belarus. Brussels expanded the list of officials and businessmen banned from entering EU countries. Their accounts in European banks have also been frozen. However, some of Lukashenko’s businessmen were not on the list.
There were press reports of Slovenia’s blocking of Yury Chyzh’s candidacy for inclusion on this blacklist. The media said it could be linked to Riko and Chyzh’s Triple’s multimillion-dollar contract to build the Kempinski Hotel in central Minsk. Nevertheless, Lukashenko’s businessman was added to the EU’s new sanctions list in March 2012.
In an interview with BelTA in the summer of 2012, Škrabec said that EU politicians had chosen the wrong approach to Belarus:
“The current situation is particularly damaging to representatives of European business structures. After all, Belarus, having found the doors of the European Union closed to it, will be looking for other ways out, which may turn out to be even more favourable. And Europe will be stewing in its own juice. For my part, I can assure you that we, representatives of the business community, are trying to influence politicians to tell them the truth about Belarus”.
“Of course, we deplore the unrest, discontent and political friction in Belarus. As a businessman, I prefer to leave assessments and opinions on political events to political analysts who better understand the current situation than I do”.
ОThe Ambassador of Belarus to Austria and Slovenia, Alena Kupchyna, presents a medal to Janez Škrabec, co-owner of Riko and Honorary Consul of Belarus in Slovenia. October 2019. Source: riko.si
In June 2021, Slovenia withdrew its consent to the operation of the Belarusian consulate in Ljubljana. Škrabec was no longer an honorary consul.
But it was not long before Riko produced another honorary consul. After all, the closing of one door is the opening of another.
HONORARY CONSUL OF SERBIA
In March 2023, the Serbian government announced the appointment of an honorary consul in Belarus without much fanfare or detail. Živorad Smiljković, head of the Riko office in Belarus, obtained the position.
Slobodna Evropa has learned from unofficial sources that the new honorary consul is close to the Socialist Party of Serbia. The party is led by Ivica Dačić, a foreign minister at the time. The party itself declined to answer the publication’s questions.
The diplomat and former Serbian ambassador to Belarus, Srećko Đukić, described Smiljković as a man who definitely “knows Belarus inside and out” and who certainly knows the Serbian establishment that is now in power.
Before that, Serbia did not have an honorary consulate in Belarus. So, former longtime ambassador to Belarus Srećko Đukić considered opening it unusual.
Should we expect further expansion of Riko’s activities in Belarus because of this? After all, despite the inconvenience caused by sanctions and the “corruption scandal”, the company continues to operate in Belarus.
Buro has access to the Serbian Foreign Ministry’s official response, obtained by the Serbian investigative media KRIK, to the appointment of Živorad Smiljković as Honorary Consul of Serbia in Belarus. It said the move was “intending to improve bilateral relations at all levels, particularly by promoting economic cooperation and attracting new investment”.
November 2021. Živorad Smiljković (first from left), head of Riko’s representative office in Belarus, and Viktar Karankevich (second from left), Minister of Energy of Belarus, at the inauguration of the first digital substation modernised by Riko in the Mahilou district. Source: belta.by
The Ministry of Foreign Affairs’ response also explains why Živorad Smiljković was proposed for the honorary consul post: He is “a qualified economist and director of the Riko representative office in Minsk” who has good contacts with regional and city authorities throughout Belarus.
DUBIOUS SHIPMENTS TO RUSSIA
However, Riko’s owners’ business interests extend beyond Belarus. We found suspicious equipment shipments to Russia in 2022/2023.
For example, according to customs data, on August 10, 2013, Riko’s subsidiary in Belarus, Riko-Tekhtsentr, delivered to Russia components for modernising the vertical milling machine – adapters, screws, valves, clamps, brackets, plates, drills, milling cutters – for a total of more than $120,000.
“It’s commercial information. There will be no comments", Riko’s Minsk office said regarding equipment deliveries to Russia.
The supplies include Western components that the EU banned from selling to Belarus and Russia as early as spring 2022. The sanctions went into full effect in the summer of that year. The sole recipient of the goods is the Russian company AvtoVAZ, based in Tolyatti, which manufactures Lada brand cars. AvtoVAZ has been under Ukrainian sanctions since October 19, 2022, and U.S. sanctions since September 14, 2023.
Are these 2023 shipments a circumvention of sanctions? It was not possible to ascertain precisely. If the components were purchased and delivered to Belarus before the sanctions came into force, this cannot be considered a circumvention. After all, Belarus is not obliged to comply with the European Union’s and other countries’ sanctions.
The Slovenian company Riko explained that it strictly adheres to the EU sanctions in place. It added that its subsidiary in Belarus, Riko-Tekhtsentr, operates independently and is not subject to its influence.
“Despite the corporate ownership structure, Riko d.o.o. does not exercise operational management [over Riko-Tekhtsentr]. Due to restrictive measures and limited business opportunities, we have attempted to sell the company several times. Still, local legislation has so far prevented us from doing so”, Riko wrote in response to an inquiry from our colleagues at the Slovenian publication Oštro.
At the same time, since June last year, European companies have been required to “make every effort” to ensure that their subsidiaries in third countries do not evade sanctions.
“We do not know whether the Riko’s export to Belarus was in breach of sanctions. However, we do know that Riko owns 99% of the Belarusian company that re-exported those goods to Russia after the launch of the full-scale invasion. As such, Riko was clearly aware of those re-exports, whom they were going to and what they were being used for, and had the authority to prevent these transactions. So whilst there is no evidence that these transactions were unlawful, they certainly look morally dubious”, Alex Prezanti, co-founder and lead counsel at State Capture: Research and Action iNGO, told Buro.
As for the 2022 deliveries, the goods were delivered directly to Russia by the Slovenian company Riko. Some spare parts were delivered after the sanctions were imposed but before they came into force. Avtodizel (Yaroslavl Motor Plant) is listed as the cargo consignee. It is part of the GAZ Group of Companies. Forbes describes the GAZ Group of Companies as an asset of billionaire Oleg Deripaska. More than a thousand Western companies withdrew from the Russian and Belarusian markets after the start of the war. But Riko stayed in our region. The Slovenian company has an account with Belarusbank, subject to EU restrictions.
As you can see, Riko and its owners have been doing business in Belarus for decades, fulfilling multi-million dollar orders. They pay bribes to Belarusian officials to get super-profitable contracts, but they are not held accountable. This state of affairs is ensured by strong ties with members of Lukashenko’s family. Slovenian businessmen have no qualms about supplying Russia with goods after the outbreak of war.