Entrepreneur Jozef Majský claims that his control of media outlets was a decisive factor in the September, 1998 electoral victory of the current government.
photo: Ján Svrček
In early March, Majský made headlines once again by announcing the purchase of a 46% stake in the gas storage company Nafta Gbely. The Nafta stake was sold in 1996 by the FNM state privatisation agency for 500 million crowns, approximately one seventh of its market value at the time. Although the government had already announced its interest in having the Nafta sale declared invalid by the courts, Majský quietly bought the shares from owner Vladimír Poór for about 400 million crowns.
The Slovak Spectator met Majský at the Bratislava headquarters of Sipox Holding. The firm is housed in a posh multi-storey building located near the castle in one of the wealthiest neighbourhoods in the capital.
The Sipox foyer contains an exotically carved grandfather clock and a pop-art portrait of Majský himself holding a cigarette and smiling happily. "Just follow the red carpet," said the doorkeeper, "and it will lead you to Mr. Majský's office."
Majský was not present when The Slovak Spectator arrived, but a stuffed leopard and mountain goat quietly guarded the door to his inner sanctuary. Eventually the man himself showed up, shouting into a mobile phone and apologising for his tardiness. "I don't really have time for you," he said, "but let's get started anyway."
The boss of Sipox Holding, Slovakia's seventh-largest company, claims to have left-wing sympathies.
photo: Ján Svrček
Jozef Majský (JM): The whole thing started back in 1989, during the communist era, when I established something called the Sipox Cooperative. The cooperative was the only form of private enterprise that could exist under communism. I started this business with four of my friends. The basic capital was five thousand Slovak crowns. We focused mainly on foreign trade in the field of information technology.
TSS: How did Jozef Majský perceive the 'Velvet Revolution' of 1989 in the former Czechoslovakia?
JM: I really welcomed the change, but I didn't attend the street demonstrations myself, because I didn't have the time. I took advantage of the change to begin importing different materials and products to Slovakia, which in turn transformed my company - in 1990, the company's name was changed to Sipox Limited, with a basic capital of 100,000 crowns. Later, in 1994, we became a joint-stock company.
Under communism, I always had the feeling that I could do more than [the regime] would allow me to do. I suffered from the limitations imposed by the communist rules. So I was doubly happy that after the revolution I could travel abroad freely and sign contracts all around the world. I could basically wake up in the middle of the night and travel abroad for business. That was something new and I welcomed it. I took it as a development of my personality and as a kind of self-realisation.
TSS: Sipox consequently became a giant of the Slovak economy, a development that must have taken a fair amount of political lobbying. People say that you are the kind of man who can make friends with politicians of any stripe. To what extent is this true, and how much do big entrepreneurs have to worry about making political friends in Slovakia?
JM: Ministers come and go. Their posts are not permanent, so it's important to meet influential people, since any one of them might in future become a minister. On the other hand, however, I definitely went against the economic politics of [former Prime Minister Vladimír] Mečiar. I was maybe the only big entrepreneur that resisted the former government.
Of course, before the last [1994 to 1998] Mečiar government, I met with ministers and parliamentary deputies from [Mečiar's] HZDS party, but my inclinations have always been towards the [former communist party and current ruling coalition member] SDĽ. This was because of my social feelings. I have always been trying to find some middle way, which would give a chance even to those people who know how to work but are not highly talented and would not survive in a free market economy. So I have always been inclined to favour the social-democratic programme rather than the right wing or nationalist platform.
TSS: What kind of political contacts do you have, and how strong are they?
J.M: I think that if somebody [like Majský] employs almost 11,000 people and has more than 40 companies, he cannot survive without a certain level of political support and certain ties with government people with whom he could share opinions.
On top of that, Slovakia doesn't yet have a standard brand of democracy. It will take years until we can finally be compared with western countries. And the less stable the economic environment, the less the government programme is followed, the more political lobbying is required.
However, I'm not saying that politics and business should go hand in glove, as happened in the case of Alexander Rezeš, who was a Transport Minister at the time that he privatised the [massive steelmaker] VSŽ.
TSS: Despite your negative attitude towards the HZDS, you regularly attended meetings of the HN Club [a joint forum for Slovak business and political figures], at which you would drink and laugh with various HZDS deputies and ministers. Last summer, however, you did the same thing with representatives of the SOP party, which today forms part of the government. How do you explain such behaviour?
J.M: I didn't change. During the four years that the HN Club lasted, I always slammed Mečiar's government.
As for the SOP, I wanted to support these people. The same applies to whole [current ruling] coalition. I supported them and I think I did enough for this coalition to make them win in parliamentary elections. I met all the parties, but I only supported those I wanted.
TSS: What kind of electoral support are we talking about?
J.M: I don't want to go into details, but the support I gave them was extraordinary, and I was one of the few Slovak entrepreneurs to do it. The help I gave the current coalition in last September's elections was of fundamental importance.
TSS: What tools did you use to support the current government?
J.M: I used mass media, since as you might know, I have my fingers in different media [such as the daily Sme paper and the private station Rádio Twist]. It was just a question of replacing certain people and telling them how to write. Other possibilities included television and radio broadcasting. I think the media were in this way influenced sufficiently [to bring electoral victory to the present ruling coalition parties].
TSS: What's the future of Sipox Holding? Do you want to go on with your current programme, or do you plan to restructure the company?
J.M: Sipox Holding is now under restructuring. Foreign investors will enter some of our companies, as we want to focus more on foreign trade and stabilise the holding company. We're also preparing to weather the bad economic situation in Slovakia, since some steps that this government has taken are not good. We expect that restructuring the state sector will take time.
Sipox has to survive, however, because it employs thousands of people. Maybe we will make room for new commodities and enter new economic sectors. We cannot just be satisfied with our current state. No, the company is still far from what I envision.
TSS: Speaking of foreign investments, do you think that the economic austerity package was a good enough signal for investors to start injecting money into the Slovak economy?
J.M: The response of foreign investors has not been positive. You can pass austerity measures, but you have to do it quietly and avoid loud noises. The government was supposed to pass the package in silence, and when this didn't happen, foreign investors began to lose confidence.
The economy is a very sensitive barometer. As soon as entrepreneurs begin to feel doubts or financial danger, they withdraw and don't invest their money. Every business must have a clear perspective. Let's say a businessman has 10 million crowns and wants to put his money in business with the knowledge that it will be returned to him after five or six years. Once he understands that he can be threatened or sued because of problems connected with the former government, he freaks out. In such cases, money which might be released to support some company freezes, and if the confidence problem is widespread enough, the entire economy experiences cash flow difficulties.
So [investor confidence] is a very sensitive question, and I don't agree with the way the current government is solving the economic problems it inherited. If someone broke the law, let's prosecute him, let's sentence him, but let's not scream about it on the covers of magazines and newspapers, because that creates an atmosphere of fear which has no place in business.
Yes, I agree that financial and tax police forces should become more pro-active, but this should be a gradual process, not like robbing Peter to pay Paul. We have to realise that many people are corrupt, a fact that will create new problems. Any new ideas and measures we apply absolutely have to be systematic.
The economy can be compared to a massive engine with lots of intermeshed gears. If you stick your fingers in without great care, the machine will squash them all. What you have to do is to slow the machine down, to stop it before you change the gears, so that you end up with both a different transmission and a full complement of fingers. But if you just ram your fingers in there, you'll not only become an invalid, but the gears will continue to do whatever they want and you will never be able to fix it with only one functional hand.
What I mean to say is that we cannot execute economic changes wildly, with one minister going this way, another one that way, the third acting like an even bigger cowboy, the fourth screaming louder, the fifth prosecuting even more people etc. That's very childish behaviour, and it is simply not going to lead us towards the goal we agreed on.
I'm a supporter of the legal state. However, not just anybody can give interpretations of the law, not even ministers. The only legal institution [empowered to do this] is the court. That's how it should be. But if the state freezes the wages of judges, they will compensate for it through bribery. This happens everywhere. The state is facing a mess in many areas, and it is passing many non-systematic solutions which cannot lead to political or economical stability. This is reflected also in the perception of foreign investors, who react to these issues very sensitively.
TSS: You have wide contacts with foreign investors. Do you think your ties can help the Slovak economy?
JM: I'm just now negotiating a non-repayable foreign loan of 16 billion crowns [$400 million], which should go straight into the state treasury. I am permanently negotiating with foreign banks and financial agencies to bring some capital to Slovakia. I am convinced that taking more loans to get through this transitional period will not hurt, because we must get out of this poverty somehow. However, our path must follow a certain concept, not just that of threatening people. On the contrary, we have to cheer people up, provide them with some security and allow them to develop small and medium sized enterprises. That would provide income for the state. Everywhere else in the world, 60 to 70% of total state budget incomes come from small and medium enterprises.
15. Mar 1999 at 0:00 | Slavomír Danko