Bulgaria’s Anti-Corruption Fund (ACF) NGO has revealed a massive secret energy cartel comprising over 150 companies owned by controversial businessman Hristo Kovachki, who for years had denied controlling any of them.

In the ‘Grass Head’s Holding Company’ investigation, ACF quotes internal documents proving that Kovachki directly owns all of these companies, including key energy companies such as the Brikel and Bobov Dol coal-fired power plants (TPPs), The businessman has repeatedly said he was just a consultant.

“For the first time, internal documents provided to the ACF from the companies’ archives list Kovachki as the real head of an invisible energy holding company with an annual turnover of over BGN5bn [€2.6bn]. The conglomerate comprises eleven power and heating plants, several mines, numerous companies trading in gas, electricity, carbon emissions, and biomass, as well as pension and insurance funds, as well as transport and repair companies,” ACF said in an announcement of the investigation on its website.

ACF shared internal documents containing evidence of coordinated actions by energy companies in Kovachki’s cartel and manipulation of prices on the free electricity market.

The NGO also said that the businessman’s companies have been siphoning off the profits of the holding’s coal-fired thermal power plants through fake transactions with so-called ‘buffer companies’, also owned by Kovachki.

For 2023, the companies in the holding concealed over BGN900mn in undistributed profits and failed to pay hundreds of millions of lev owed in social security contributions and taxes.

“Everything in the holding happens through offshore companies and through dummies. I myself was a dummy of one of Kovachki's companies,” Veselin Todorov, who led the gas trading business in the holding between April 2019 and December 2023, said in an interview with ACF.

Although the companies in the holding were formally run by different people without any connections to each other, the real management of the holding is highly centralised, and all decisions – from strategic transactions to routine costs for consumables in individual companies – are personally approved by Kovachki, Todorov said.

He added that all accounting of the holding's seemingly unrelated companies is also carried out centrally, by a limited circle of accountants who collect flash drives with the electronic signatures of formal senior managers and manage the transfer of funds between companies.

ACF also claims that the holding, unofficially named ‘Orion’ by Kovachki, has been paying bribes to state officials and granting six-digit loans to politicians.

According to Todorov, Kovachki received information not only about the raids carried out by the European Public Prosecutor's Office in 2023, but also about his employees’ testimonies during subsequent interrogations.

"Those colleagues of mine who were interrogated, then Kovachki had given them their own testimonies to read. The words of all those who were investigated had reached him, even when the investigators were only from the European Public Prosecutor's Office," Todorov said.

He added that he himself was subject to intimidation and pressure when he decided to leave the holding.

"When I wanted to leave the holding, because I was deeply aware of the things that were happening there, he asked me to sign a promissory note to guarantee my silence. When I did not, he sent people to wait for me at home."

After Todorov’s departure, Kovachki began lawsuits against him, seizing his accounts for an amount of BGN350,000.

The holding company’s documents, according to Todorov, are approved with specially made stamps featuring cartoon characters, which employees within the system know to be Kovachki’s de facto personal signature.

“If you see a stamp, it’s God’s law,” Todorov said.

He added that the stamps are changed periodically, and their replacement is approved by “order of the chief”, as Kovachki had to be called in all written documents. All of Kovachki’s orders come from the same email address: chichkotrevichko112@gmail.com (‘chichko trevichko’ means ‘grass head’ in Bulgarian).

Although there was a ban on mentioning Kovachki’s name in writing, the ACF obtained documents in which it appears.

Formally, the companies are managed by highly paid managers. In practice, however, Kovachki makes every important decision, and the managers have signed promissory notes worth millions to the companies they supposedly manage.

For example, Desislava Filipova, Hristo Kovachki’s PR manager and owner of sixteen companies in the holding, signed a promissory note for BGN2.5mn, while Dimitar Ivanov, former head of Kovachki’s security and director of Tibiel EOOD, one of the largest gas traders in the holding, owes BGN3mn.

ACF also wrote that over 70 of the holding companies are registered outside Bulgaria.

“Many of the coal-fired power plants – in Bobov Dol, Pernik, Pleven, Ruse and Burgas, as well as the mines in Stanyantsi, Beli Breg and Chukurovo – are British-owned. The district heating companies in Sliven, Veliko Tarnovo, Gabrovo and Vratsa are registered in Cyprus, while the owner of the mine, Cherno More-Burgas, is registered in the Seychelles,” it noted.

An internal document, issued shortly before the snap general election in 2022, contains an order from Kovachki to all directors of companies in the holding to submit “proposals for trusted persons to be included in the lists of political parties” to Kovachki’s chichkotrevichko112@gmail.com email.