Corpbank majority owner sues Bulgaria through European court

Corpbank majority owner sues Bulgaria through European court
By bne IntelliNews April 7, 2016

The owner of bankrupt Corporate Commercial Bank (Corpbank), Tsvetan Vassilev, has filed two claims against Bulgaria with the European Court of Human Rights, BNR radio reported on April 6.

Vassilev is the majority shareholder of 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 (€1.9bn) capital hole. As a result, the bank’s licence was revoked and it was declared insolvent in April 2015.

Vassilev claims that Bulgaria has violated his human rights and will also sue the country for confiscating the licence of his company Bromak, through which he owned Corpbank, BNR reported.

Also on April 6, a Belgrade court resumed proceedings on an extradition request by the Bulgarian authorities. The businessman has been a fugitive in Serbia since September 2014. A previous ruling approving the extradition was overturned on appeal. Vassilev is considering asking Serbia for asylum.

In March, Bulgaria filed claims against Vassilev with the Sofia city court. The BGN2.2bn claim was filed by Bulgaria’s commission for withdrawal of criminal assets (KONPI) against Vassilev and 26 individuals and companies linked to him. The claim has already been allocated to a Sofia city court judge, who is due to examine it by May 20. The collected evidence comprises more than six tonnes of paper.

On April 6, Vassilev accused controversial Bulgarian businessman Delyan Peevski, a media mogul and member of parliament who was once his business partner, of being behind the claims against him. Peevski is a lawmaker from the predominantly ethnic Turk Movement for Rights and Freedoms (DPS).

“It is obvious that the DPS was behind this and with the time other people joined them, but this will become clear later,” BNR quoted Vassilev as saying.

On December 1, the Sofia city court imposed precautionary measures on BGN603.7mn of 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.

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 DPS. The amendments require a confidential report prepared by 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 for the report to 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 Bulgarian Deposit Insurance Fund’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.

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