International forensic firm АlixPartners has estimated that about BGN750mn – BGN800mn (€383mn – €409mn) in receivables of bankrupt Corporate Commercial Bank (Corpbank) can be recovered within 12 months, according to the Bulgarian language version of the consultant’s report.
In June 2014 Corpbank, then the country’s fourth largest lender, suffered a bank run that deprived it of liquidity. It was put under central bank administration and an audit showed a BGN3.75bn capital hole. As a result, the bank’s licence was revoked and it was declared insolvent in April 2015.
AlixPartners originally tried to stop publication of the report dated September 23, 2015. However, parts of the report were published on Corpbank’s website on May 3 after the parliament adopted amendments to the law on bank insolvency. Under the amendments, AlixPartners’ proposals for collecting the receivables will remain confidential.
АlixPartners found that some BGN2.55bn out of total credit portfolio of BGN4.82bn had been lent to entities reportedly linked with Corpbank’s majority owner Tsvetan Vassilev, who has been a fugitive in Serbia since 2014. The forensic firm said that such loans usually have very limited, if any, potential to be recovered. There are “strikingly many connections” between Corpbank’s borrowers, the document said.
When the consultant reported its estimate of the amount likely to be recovered, it added that the amount could be increased if court cases are initiated against Vassilev and third parties.
In March, Bulgaria’s commission for withdrawal of criminal assets (KONPI) filed a BGN2.2bn claim against the tycoon and his associates. However, the following month, Vassiliev reportedly filed two counter claims against Bulgaria with the European Court of Human Rights, claiming his human rights had been violated.
АlixPartners also found that there had been a multitude of the so-called “red flags”, evident in extending the loans and in the operation of the borrowers’ accounts, that it said “could have been noticed by a number of parties, such as a competent and impartial credit team, and/or competent management board, and/or the external auditors, and/or possibly the central bank.” KPMG was Corpbank’s auditor.
The Bulgarian Deposit Insurance Fund (BDIF) has paid some BGN3.67bn to owners of guaranteed deposits at Corpbank since December 4, 2014.
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