The public broadcaster HTV reported on Sunday evening that the Chief Public Prosecutor's Office (DORH) was investigating the sale of an attractive piece of land near the northern Adriatic town of Rovinj whose value had risen from a million kuna to 25 million kuna after urbanisation. HTV said that Ostojic was involved in the purchase, urbanisation and sale of the land.

Ostojic said in a statement on Monday that the project on the Skvacota location in Bale had been the subject of media reports several times before, prompting inspections by relevant institutions. He stressed that in the last eight years inspectors had found no irregularities in the project.

"If any complaints have been made regarding this case, I expect DORH to look into all facts relating to this project and to notify the public of its findings as soon as possible. I was acquainted with and partly involved in those transactions and activities because the project concerns my wife's family. I can only confirm that the family behaved responsibly towards all parties involved in the transactions. I myself did not purchase, urbanise or sell any land in Bale municipality," the minister said.

The plot of land in question was purchased in 2004 by his sister-in-law with a view to expanding her hotel business by opening a boutique hotel in Bale. Ostojic said that the municipal administration adopted an urban development plan in 2006 allowing only tourism-related businesses in that area as part of its idea to develop the municipality as a tourist destination.

At the time when the urban development plan was adopted, the Bale Municipal Council had 11 councillors, of whom seven were members of the Independent List of Plinio Cuccurin, which was later renamed Ladonja, while only two were from the Istrian Democratic Party (IDS), of which Ostojic is a member.

"I believe the public knows about relations between the IDS and Plinio Cuccurin or Ladonja, and there is no need for me to make any further explanation of this matter. So much for the insinuations that such decisions could have been influenced from outside Bale," Ostojic said.

Given the highly set standards for the construction of the boutique hotel, the value of the investment was estimated at about 20 million euros, which amount was "too much to bite off" for the firm, and considering the instability of the financial market, the only option was to seek a new investor for the hotel project. The project was eventually sold in 2007 to investors who continued to develop it and "I hope that Bale and Istria will soon get their first boutique hotel at that location," Ostojic said.

According to HTV, the former land owner, the Mitton family, sold the land in 2004 to the family of Veljko Ostojic who at that time was a member of the Istria County government. Ostojic's family bought the land for 860,000 kuna, shortly after which the area was urbanised and the price of that plot jumped to 25.6 million kuna.