105 W. Madison Street

Suite 1200

Chicago, Illinois 60602


312.332.6833 fx



January 24, 2005



Management Board


Koeniginstr 28 D

80802 Munich, Germany




Subject:    The case of stock ownership rights of Mr. Pašk Kačinari, Zagreb, Croatia vs. "Zagrebacka banka" d.d., Zagreb, Croatia



Dear Sir/Madam,


I am writing to you as the United States legal representative of, Mr. Pašk Kačinari of Frankopanska 9, Zagreb, Croatia, wholesaler in gold and diamonds, who has alleged that "ALLIANZ" A.G., Munich, Germany and  "UNICREDITOITALIANO" S.p.A., Milan, Italy, hereinafter the 'Consortium', has inflicted damages to him an amount in excess of $100 million.


My client claims that the said damages came about in such a way that the said Consortium, on February 15, 2002, performed a stock swap with a group of shareholders of "Zagrebacka banka" d.d., Zagreb, Croatia (hereafter referred to as ZABA), in such a way that 20% of the share capital of ZABA was paid for in cash, while 80% was acquired by way of a stock swap.  Upon this stock swap, the previous ZABA shareholders were now recorded as holders of "New Unicredito shares", while the "ALLIANZ" - "UNICREDITOITALIANO" Consortium was now registered as shareholders of ZABA, so that "ALLIANZ" A.G. was registered as holder of 13.67% ZABA shares, and "UNICREDITOITALIANO" as holder of 81.91% of shares, meaning that the Consortium at that time was registered as owner of 95.58% ZABA shares.


A short history of the transaction is important.  On November 13, 1990, my client, in the capacity of a private investor, signed a contract with ZABA, on the basis of which ZABA was required to acquire in my client's name 164,421 of its own shares directly from its own issuance of stock and register my client as the shareholder in the shareholder register.  We have attached hereto for your review Exhibits #1, #2, and #3 which show the contract, a letter from ZABA to my client confirmaing the purchase, and the actual receipt from the transaction.


ZABA did not fulfill this obligation, instead using the money from the deposit to acquire shares for another party.  This other party, which became registered as a shareholder on the basis of my client's funds, after a period of more than ten years, swapped its shares with the "ALLIANZ"-"UNICREDITOITALIANO" Consortium, resulting in the present situation where the Consortium, in place of my client, is registered as shareholder.


My client claims that this amounts to a confiscation of his property, underlining that this took place during the time of a fierce inter-ethnic war in the Balkans, when confiscations were an everyday occurrence.  My client further claims a contributing factor to this confiscation could be found in his status of an ethnic Albanian and member of an ethnic minority in wartime Croatia.


In investigating what happened with his shares, my client discovered that during its reorganization near the end of communist rule in Croatia, on December 27, 1989, ZABA reported to the relevant judicial authority its first issuance of shares, which numbered exactly 851,827 shares.  The shares in question were from the First issuance of Series "A," which shares ZABA was obliged to acquire in my client's name from the funds of his deposit.  Today, ZABA has 2,661,196 issued First Series "A" shares recorded in its share register.  What is relevant is that in the wartime period between December 27, 1989 and December 31, 1993, the number of issued First Series "A" shares grew from the initial 851,827 on the day of the first issuance to 1,862,115 shares.  During this interval, ZABA did not report either a new share issuance or a capital increase.  Thus, 1,010,288 were subsequently recorded in the share register as issued First Series "A" shares.  ZABA justified its actions by carrying out repeated, retroactive changes to its original decision to issue First Series “A” shares, of December 27, 1989.  In addition, at its Annual Conference of May 31, 1995, ZABA increased the holdings of each "shareholder" by 42.86%, thereby increasing the number of issued First Series "A" shares to its present-day number of 2,661,196, and thereby increasing the damages to my client.


It is clear that this was a case of a subsequent covert issuance of shares, partly financed by my client's funds.  In other words, over 10% of the shares of this mysterious, covert issuance of shares should have been registered to the name of my client, Mr. Pašk Kačinari. 


These subsequently issued shares, which include my client's confiscated shares, are "mixed" with the originally issued First Series "A" shares.  It appears that these shares have been held in the ZABA Treasury, and that ZABA's Management illicitly used the votes attached to these shares to secure voting majorities at ZABA Shareholder Conferences.  This is indicated by auditing reports for the years 1998, 2002 and 2003, which contain the identical auditor's quote that "The Bank has a certain number of Treasury shares," without reporting their actual number.


In the opinion of Mr. Kačinari, the Consortium did not become the true owner of ZABA following the share swap, but only "the guardian of stolen shares."  Thanks to the share swap, the Consortium had the opportunity to increase its book value without paying the true economic price.  However, the fact that ZABA Management has remained unchanged and that ZABA has not been completely integrated into either of the Consortium's members indicates that the Supervisory Board is subject to certain untransparent limitations which are outside the bounds of law and not in line with the ZABA statute.


In connection with the above, Mr. Kačinari has on many occasions addressed the Consortium's registered representatives in the ZABA Supervisory Board and the ZABA Shareholders' Conference.  Thus, Mr. Kačinari:


1.    On May 9, 2003, sent written correspondence to the then-president of the "UNICREDITOITALIANO" Supervisory Board, Mr. Roberto Nicastro.

2.    On July 17, 2003, sent written correspondence to the president of the ZABA Supervisory Board, Mr. Roberto Nicastro, and Board members Dr. Klaus Junker and Mr. Torsten Leue.

3.    On November 15, 2004, sent written correspondence to the recorded ZABA Supervisory Board president, Mr. Paolo Fiorentino, the recorded ZABA Supervisory Board deputy president, Ms. Marina Monassi, as well as to the other recorded members of the Supervisory Board.  The correspondence was received at their address of record by Supervisory Board members Dr. Klaus Junker, Mr. Torsten Leue and Mr. Giuseppe Vovk.

4.    On April 24, 2003 and April 22, 2004, addressed the ZABA Main Shareholders Conferences.


In addition, Mr. Kačinari presented his case in great detail and has, in the legal proceedings he has initiated against ZABA in Croatian Courts, provided a total of 58 documents supporting his case and his rights.


To date, neither ZABA nor it’s formally recorded owners from the "ALLIANZ"-"UNICREDITOITALIANO" Consortium have ever addressed my client, nor have in any way responded to these accusations.  The consortium has completely ignored my client's willingness to settle this matter amicably.


Now my client has requested me, as his legal representative in the United States, to legally review this entire case.  I am also being aided in various segments of this case, by certain experts already acquainted with the case. I have agreed to represent Mr. Kačinari and have reviewed the substantial documentation provided to me by Mr. Kačinari and find his claims to be justified.


It is impossible to engage in proving Mr. Kačinari's rights without proving how, under highly questionable wartime circumstances, the entire ZABA avoided a transparent and legal privatization, or without proving who it was during these wartime years that took over ZABA, who was registered as shareholder of covertly issued shares that were "added" to the shares of the original issued First Series "A," which had been obliged to become the property of Mr. Kačinari.  In addition, this case could spawn a whole series of debates on the subject of who it was with whom the Consortium has formed partnership and why.  This would inevitably politicize the case, unavoidably dragging the Consortium into the "murky waters of local Western Balkan affairs."


My client has no interest in politicizing this case, nor to present the Consortium in a negative context before American and world public opinion.  The only thing my client seeks is to recover his claim in its entirety, and he has authorized me to take all necessary legal steps to bring this matter to a close.


It is obvious that my client will not be able to recover his claim from ZABA amicably, as the mentality of its Management can be described in such a way that they "feel superior in relation to any local social institution," or, better said, that they consider themselves to be "above the law."  It also appears, which is much more surprising, that the members of the Consortium itself, Western financial corporations of considerable repute, have so far displayed a tendency to follow the ZABA Management manner, having ignored my client's direct communications to its representatives thus far.  It is difficult to imagine that the Consortium is willing to accept the local, Western Balkan rules of engagement and conduct, leftover from communist and war years, and "blend into the landscape," instead of striving to import the rule of law and respect of private property that stand behind their own and their home countries' success and reputation.  It is equally difficult to fathom that the Consortium is counting on the docility and/or weakness of Croatia's political and judicial institutions, and media, and hoping that the case will either somehow go away or remain buried in the region's obscurity, far from the Western media's - and their own shareholders' - probing eyes.


Therefore, on the hope that the fears expressed above are groundless, it is our desire that an amicable settlement of this case should once more be sought in direct communications between my client and the Consortium, and through a direct agreement between my client and the Consortium.   At the time of this writing, my law office has not yet undertaken to prepare a lawsuit against your companies, and we are still analyzing the various aspects of the case and defendants.


If it is your opinion that ZABA should reach settlement with my client, I invite you to solve the problem in such a way that the members of the "ALLIANZ"-"UNICREDITOITALIANO" Consortium directly contact Mr. Kačinari, through this office.



                                                                                        Very truly yours,



                                                                                           Paul Djurisic







CC:   Supervisory Board Members – ALLIANZ

Board of Management – ALLIANZ

International Executive Committee - ALLIANZ

International Advisory Board - ALLIANZ

Investor Relations –ALLIANZ

Board of Directors – UNICREDITO ITALIANO

Global Investor Services - UNICREDITO ITALIANO