Bulgaria’s commission for withdrawal of criminal assets (KONPI) has filed a BGN2.2bn (€1.1bn) claim against controversial local tycoon Tsvetan Vassilev with the Sofia city court.  

Vassilev is the majority shareholder of bankrupt Corporate Commercial Bank (Corpbank), through which billions of taxpayers’ levs are suspected to have been siphoned off. 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 As a result, the bank’s licence was revoked and it was declared insolvent in April 2015.

The Bulgarian Deposit Insurance Fund (BDIF) has paid some BGN3.67bn to owners of guaranteed deposits at Corpbank since December 4, 2014.

The claim was filed against Vassilev and 26 natural and legal persons linked with him, local media reported. KONPI has also levied distraint on BGN1.4bn worth of Vassilev’s assets.

KONPI’s claim has already been allocated to a Sofia city court judge, who should examine it by May 20. The collected evidence comprises more than six tonnes of paper.

On December 1, the Sofia city court imposed precautionary measures on BGN603.7mn in assets owned by Vassilev. However, the businessman’s lawyer Konstantin Simeonov stated on December 2 that KONPI does not have the right to take away property. Vassilev has denied any wrongdoing.

The businessman has been a fugitive in Serbia since September 2014. On April 6, a Belgrade court will resume proceedings on an extradition request by the Bulgarian authorities. A previous ruling approving the extradition was overturned on appeal.

In a related note, on March 11 the parliament adopted in its first reading amendments to the law on bank insolvency, proposed by lawmakers from the opposition predominantly ethnic-Turk Movement for Rights and Freedoms (DPS). The new amendments require a confidential report prepared by the international forensic firm АlixPartners to be published. The consultant was hired in June 2015 to investigate the assets of Corpbank, and the result was a report dated September 23.

In February, the ministry of finance sent the document to the parliament’s registry office. The ministry also published a letter from AlixPartners, in which the firm reluctantly expressed its willingness that the report might be released on a limited basis to the parliament’s security department or secret registry. This would allow lawmakers to review the document, but the firm said it could not be copied or distributed outside the department.

On March 11, Radoslav Milenkov, chairman of the BDIF’s management board, said that in the cases of bank failures, the recovery rates are about 10-20%, according to global practice. He also said that offices in other countries have been hired to recover assets, which will be included in Corpbank’s bankruptcy estate.