Bulgarian prosecutors charge 18 over Corpbank collapse

Bulgarian prosecutors charge 18 over Corpbank collapse
By Dimitar Koychev in Sofia July 21, 2017

The Bulgarian specialised prosecutor’s office has filed indictments against 18 people over the collapse of Corporate Commercial Bank (Corpbank), a notice on the website of the prosecutor’s office said on July 20.

In June 2014 Corpbank, then Bulgaria’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 (€1.92bn) 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 As a result, the bank’s licence was revoked and it was declared insolvent in April 2015.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 out BGN3.68bn in guaranteed deposits to Corpbank depositors since December 4, 2014.

The list of those indicted begins with Corpbank majority owner Tsvetan Vassilev, who has been a fugitive in Serbia since 2014 and has so far avoided extradition to his home country. It also includes Corpbank officials, two KPMG auditors and two former central bank (BNB) deputy governors.

The indictments are described in over 5,000 pages. More than 400 witnesses have been interrogated in one of Bulgaria’s largest post-communist fraud investigations. 27 experts prepared over 90 expert opinions. The collected evidence exceeds 1,360 volumes, the prosecutors said.

The indictments concern crimes suspected to have been committed in the period January 2008 – June 20, 2014. Vassilev is charged with leading an organised criminal group. One of the indictments is for embezzling BGN2.56bn. Another is for embezzling local and foreign currency worth BGN205.9mn, taken from Corpbank’s vault. So far, Vassilev has denied any wrongdoing.

The prosecutors are also charging two former BNB deputy governors and one BNB official, all from the central bank’s banking supervision unit. The banking supervision is accused of not detecting and eliminating the practice of extending loans to related parties.

In March 2016, Bulgaria’s commission for the withdrawal of criminal assets (KONPI) filed a BGN2.2bn claim against the tycoon and his associates. However, the following month, Vassilev reportedly filed two counter claims against Bulgaria with the European Court of Human Rights, claiming his human rights had been violated.

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