Boris Markov – Failed Private Bank Is Being Drained with State Knowledge Mind the horns!

The debts of a large construction company to the failed Corporate Commercial Bank (CCB) amount to 121.5 million levs. The loans are in the “bad loans” list, published by the liquidators of the bank. This money is only part of the burden placed on the taxpayers due to the government loan to cover the damages caused by the CCB collapse. However, instead of the State making an effort to collect the money, the opposite is happening: The State, represented by the Road Infrastructure Agency (RIA), pays other companies because of the deposit assignments, thus the receivables are about to become uncollectible – completely legally.

The scheme was described by the former Chair of the right-wing party Union of Democratic Forces (UDF), Boris Markov, on the social network Facebook. Markov said he stood with his name to expose it. On March 9, he revealed that at the end of 2014, RIA has paid a total of 3.8 million levs to the company “Agromah Holiday”, and this, according to him, was illegal and happened with the complicity of the head of RIA Engineer Lazar Lazarov.

Lazar Lazarov reacted immediately, saying he would sue Markov for defamation. He denied any improper payments. The Agency has repeatedly paid other companies under deposit assignments and this public tender included several assignments, said Lazarov when contacted for comment by Bivol. The total amount of the assignment payments by RIA is unknown, but Lazarov said he was ready to provide all documents. He said he had no legal basis to refuse payment on this and other assignments.

RIA has made the payments to the company exactly in the period when the public was commenting on the information that these assignments are robbing taxpayers for the second time after the CCB bankruptcy.

On Friday, March 11, the Prosecutor’s Office announced that on March 9 (the same day when Markov published his status on the social network) they have begun searches in the parent company “Agromah” Ltd. and the related to it “Roads Plovdiv” on suspicion of VAT theft.

RIA pours European money into the deposit assignment as it “had no choice”

The money paid by RIA to “Agromah Holiday” was under a public tender of the EU Operational Program (OP) Transport, won by the consortium “Makaza Pass”, with a leading contractor “Infrastructure Company” (85%). This company has 121.5 million levs in bad loans to the CCB and everything derived from its operations, including payments by RIA, must be collected by the Bulgarian Deposit Insurance Fund.

Part of the money, however, went into other directions because “Infrastructure Company” settled an assignment with “Industrial investments” JSC, a company created following the CCB bankruptcy, which specializes in buying up receivables of CCB depositors. It, in turn, signed an assignment with “Agromah Holiday”. This is one of the many subsidiaries of the construction giant “Agromah” Ltd.

RIA paid “Agromah Holiday” in blatant violation of the contract for awarding the public tender to “Makaza Pass”, which in article 86, paragraph 3 provides an explicit ban on transfer of all or part of the rights and obligations of the parties.

The payment was made possible because the contract was annexed, says Lazar Lazarov

“Agromah Holiday” is a shell company; it has no workers, no business and no assets. It did not register any activities since its establishment in 2010 until 2014, when it received the money from RIA. The origin of the funds to acquire the receivable of 3.8 million levs is a mystery. It is, however, a fact that the money received from RIA disappeared from the accounts of the company only a month later. This is according to the annual financial report for 2014, published in the Trade Register. Since mid-2015, the company has been in the process of liquidation that should be finalized on April 30, 2016. If this happens, the money will be irretrievably lost for the Deposit Insurance Fund, says Boris Markov. He has described the whole scheme in a signal to the Prosecutor General and the National Revenue Agency (NRA).

Markov explicitly states that he suspected abuse of office of the chief of RIA Lazar Lazarov, who had close ties with “Agromah” through the company “Roads Plovdiv”. According to Lazarov, himself, he has been a consultant for the sale of the company by notorious Bulgarian businessman, Socialist party functionary and owner of the Plovdiv Fair, Georgi Gergov, and by Assen Savev, son of the owner of “Agromah” Hristo Savev. This happened while Lazarov was working for the Plovdiv Fair, but there was no relation to contracts and payments to “Agromah”, he said.

Boris Markov provided to Bivol yet another evidence of the privileged, according to him, relations between RIA and “Agromah”. These are photos of large-scale construction works on a stretch of highway “Maritza”, which in the official RIA press release are listed as “calibration of expansion joints and bearings”.

The repairs have been fully paid by the company contractor under the warranty and could not have been avoided because besides the problematic joints, there have been flooded areas, said Lazar Lazarov, who explained in detail what was done and why the repair was so urgent.

Here’s what Boris Markov and Lazar Lazarov said before Bivol:

Boris Markov: RIA and Lazarov are “political party piggybanks”. I submitted reports to the prosecution and NRA.

Bivol: Mr. Markov, on March 9, you wrote on your Facebook page that you will personally expose the scheme of defrauding the Deposit Insurance Fund, featuring “Agromah” and under the cover-up provided by the head of RIA Lazar Lazarov. On the same day, the prosecution and the Interior Ministry launched an operation against “Agromah” and “Roads Plovdiv”. Was this due to your signal?

Boris Markov: I have been speaking and writing on the topic for more than four months. At what point the institutions have decided that there is some truth in my words, I do not know, you should ask them. I sent signals to NRA and the prosecution, wrote texts, spoke to journalists. For over two months no media would publish them. This forced me to write a text on Facebook and ask people to share it. This is actually how I broke the media blockade, until you got in touch with me.

Bivol: By how much will the Deposit Insurance Fund, that is the taxpayers, be deprived if the scheme is implemented?

B.M.: Directly, only under the scheme I am exposing, I have evidence of almost 4 million levs. But how much they actually have been able to “absorb”, this is for the authorities to say. Almost 4 million levs – this is for sure. But the scheme can involve a tenfold larger amount, maybe more. The company they are “saving” (“Infrastructure Company”) is indebted to the CCB in the amount of tens of millions; we can only guess how many of these millions they have managed to “save” in their accounts.

Bivol: Is this scheme linked to the notorious investigation against “Agromah” for stealing VAT from the State?

B.M.: This is also for the authorities to say.

Bivol: The owner of “Agromah” speaks of an organized attack against him. Who can be the organizer? Do you feel referred to by his words?

B.M.: Yes, yes … I heard that statement. I heard the explanation that the one million euro in a bag was for their daily “business allowance”. I would like to say that under the law, all payments above 10,000 levs must be carried out via bank transfers. Not to mention that the sum that was found is in euro. The only logical business trip, I can think of, is the owners of “Agromah” wanting to be sent wherever the “Galevi Brothers” (convicted criminals who vanished after their sentence – editor’s note) are. Long trip, no idea of coming back, 1 million would be enough. On the other hand, if they refer to me as the author of the alleged attack, I thank them; I take it as a compliment. I will only remind that four years ago, when their benefactor Eng. Lazar Lazarov was deputy in RIA and not the Chair, then I provided evidence of the bonuses distributed in the agency. Initially they denied it; then your colleague Lily Marinkova invited me to participate in her political talk show; we talked and a resignation followed. In this sense, one can say that I helped the professional development of their benefactor. There are many details from this case on the Internet; whoever is interested can find them. It should not be forgotten that while I was in politics that was precisely my job – to unravel cases and to expose schemes and that requires courage. For a year and a half now, I am not actively dealing with this stuff; I rather watch the events. But, with the people with whom I worked previously in the UDF, we continue to comment “problematic” deals and citizens continue to send me signals.

During the previous term of the party Citizens for European Development of Bulgaria (GERB) I asked a total of five resignations and received four.

I was unsuccessful only with Miroslav Naydenov (former Agriculture Minister – editor’s note). Both Naydenov and Lazarov have the same behavior that screams “I’m untouchable”. For the people who know me from the time when I was involved actively in politics, my behavior is no surprise.

Bivol: A month ago, on February 15, the day before the opening of the bids for highway “Struma”, you wrote that “Agromah” would be the winner. You hinted at ties with Eng. Lazar Lazarov. Did you have inside information on what will happen?

B.M.: I knew. “Agromah” wins everything it touches. When I posted on Facebook that it will again win the tender, they stopped it. It is a fact. And I published the post as a provocation, trying to attract attention. As I said, I have been trying for months to break the media blockade; I have spoken with a number of journalists on the subject. Unfortunately, above the journalists, there are other people and I was unsuccessful. Shortly after the discontinued tender, I signaled about another case in which RIA was trying to provide a cover-up for “Agromah”; I sent pictures, but still nothing. Now I am giving them to you to publish them to clearly show that RIA patronizes the company “Agromah”; to definitely show it.

Bivol: Why didn’t you approach Bivol back then? Didn’t you know that we are an independent media or did you think that there will be no effect from a publication with us?

B.M.: I approached media where I have some personal contact, where I knew someone with whom to talk. At first, I thought that any of them will publish my information, that all will be interested in the evidence. Then weeks passed and I realized that this will not happen. When the issue became public, the contact with Bivol somehow came naturally and now you are the only ones who have this evidence. I never had any doubts in your independence.

Bivol: What is seen on those pictures?

B.M.: We see the so-called repair of joints on the newly-opened highway “Maritsa” announced by RIA on February 14. The photos show what the real works on the ground are. This is anything, but a repair of joints.

Bivol: What are they doing?

B.M.: The photos were taken on February 17. They show repair of the roadway and serious construction works. Meanwhile, a message of the Road Agency said that what was being done was “calibration of expansion joints and bearings on the bridge over the Maritsa River”. The message also said that this stretch of the highway will be closed on February 17 and 18. So, this was an overhaul of the roadway and had nothing to do with “calibration of expansion joints”. Expansion joints are joints between two parts of the bridge, and from what you see on the pictures, it would be very difficult for anyone to even imagine where the bridge is. And anyone who has anything to do with the construction of roads and bridges will tell you the same thing! Once again, an attempt is made to conceal under fictitious planned maintenance events irregularities in the building of the highway. These renovations are now concealing errors in the construction committed by the company that completed this construction site.

Boris Markov – Failed Private Bank Is Being Drained with State Knowledge

Bivol: It is said that Peevski stands behind the company “Vodstroy 98” and Valentin Zlatev (the boss of Lukoil Bulgaia – editor’s note) is behind “GPM”. #Who is behind “Agromah” and “Roads Plovdiv” in your opinion?

B.M.: Assuming that Peevski stands behind “Vodstroy”; assuming that Zlatev stands behind “GPM”, then I categorically, without assumptions, argue that RIA and personally Lazar Lazarov stand behind “Agromah”. The question is where the money of “Agromah” went, after being financed with funds from RIA. I do not know, but it can easily be checked. Talking about the particular signal, which I submitted to the prosecution, RIA has pumped almost four million levs in “Agromah Holiday” – a company without employees, no business and no turnovers. Now it is up to the prosecution to say where the money went. It’s easy. The only thing is they have to hurry because “Agromah Holiday” is in the process of liquidation and in late April traces will disappear. Some millions suddenly enter in this company and vanish within a month. And they submit their “zero”” reports. Now NRA and the prosecutors should just check where the money went and that will answer many questions.

Bivol: Do you expect that these institutions are going to fulfill their obligations in favor of the law and public interest or are we going to register yet another cover-up of major corruption and abuse?

B.M.: I am absolutely sure that the truth will come out. The evidence is public and cannot be deleted. After this publication in Bivol, it will no longer be possible to conceal the facts; there will always be a journalist who is going to ask “What happened to the probe if what Markov alerted of and Bivol published?”

Bivol: You mention “party piggybanks”, what do you mean?

B.M.: Two things. First, this was the answer of absolutely all journalists whom I approached over the past two months. All, absolutely all of them, told me that it would be difficult to publish my information because Lazarov, himself, had been bragging that he was such a piggybank; that he had been filling the coffers – this is a way to scare lower-level employees in the administration not to speak up. When their boss tells them something so secret, they bow their heads and work on his instructions. He, himself, was saying these things to cause fear and prevent them from writing to the media, from asking questions. They announce such things themselves, then they are heard everywhere. This is a way to ensure calm at work. The second thing I want to say on the subject is that now it can be checked whether this is true or just rumors. As I told you, let the prosecution track where these particular millions that I indicated went – to individuals, to party piggybanks, and if so, to which parties. Now is the time to prove whether Lazarov lied, whether he was spreading rumors about himself. Now is the moment of truth in my opinion.

Bivol: Before whom has Lazarov bragged that he was a “party piggybank”?

B.M.: Speaking to reporters, party functionaries, I have heard it from many places. And always in the context that he, himself, makes these things public…

Bivol: Which party owns the piggybank?

B.M.: This is the $64,000 question. Now the money can for sure be traced and its final destination established. This will answer the question who is the owner of the “piggybank Agromah” which RIA systematically fills and fills it to the brim.

Bivol: If all this is so, is Lazarov a standalone player?

B.M.: I do not think he is a standalone player. But I cannot prove it. The prosecution can prove it. But if Lazarov keeps his post, I think the answer will be obvious…

Bivol: In the worst case scenario where he keeps the post and the probes are squished, what are you going to do? Or will you give up?

B.M.: Look, I think that the Prime Minister and the Minister of Interior were 100% aware of what was happening in one of the largest construction companies. I am convinced that they have been aware for weeks what will happen. They just did not tell Lazarov. Surely, this was to prevent a leak of information. I suspect that now, after the information in the case “Agromah” is processed and summarized, Lazarov is facing a talk that will not be very pleasant for him.

But if nevertheless there are no consequences, the whole fuss about greater transparency in public procurement would be just government PR. However, I see myself as a more reliable source of corruption signals than the janitors at Sofia Airport. Let’s wait and see what will follow.

Engineer Lazar Lazarov – Chairman of RIA: These deposit assignments are massive and completely legal. I will sue Markov for libel

Bivol: Mr. Lazarov, how would you comment on the statements of Mr. Markov regarding the payment to “Agromah” which he said was illicit?

L.L.: Either Mr. Markov is absolutely unaware of things or dares to speak while being misinformed. The payments to “Agromah Holiday”, as this is the company, are absolutely legitimate and have withstood all legal opinions. This is not “Agromah Holiday’s” wish, but of the contractor that we have for the project Kardzhali-Podkova – “Infrastructure Company”, which is an association under the Associations and Contracts Act. On the basis of a deposit assignment agreement, which I cannot help but honor, as they are our partner, they indicate “Agromah Holiday” as recipient. Just to let you know that this is not the first assignment, unfortunately, this is widely used by our partners, not only in this contract. And in this contract, this is not the first assignment, but the only one to “Agromah”. The other five, as they are a total of six, are to other companies.

Bivol: Isn’t this draining of CCB?

L.L.: We have a deposit assignment agreement. This assignment agreement does not say that this is the draining of a bank and so on; there is no way to comment on Mr. Markov’s revelations.

Bivol: The scandal with the assignments broke at this exact time…

L.L.: It did not break at this exact time. And I say again, nowhere in our contract it is written that whatsoever. For me, this site must be completed. When the builder tells me: “Yes, but this is one of the conditions to be able to finish the site; if you do not pay me, how am I to finish the site”? And he tells me: “Here, you have a contract,” under the law I have to obey. Tell me what was I to do? Not pay the builder? Incur penalties for the State? Then, to have someone else come and say that I robbed the State budget, because we have to pay penalties?

Bivol: Isn’t it written in the contract that payments cannot be made to third parties, only to the contracting party?

L.L.: This was written before the first deposit assignment; then in the very assignment there was an additional annex in which this has been changed.

Bivol: If OLAF decides to deal with the case as this is European money?

L.L.: I am absolutely calm. I got a letter of apology from OLAF. Because people came. OLAF sent them at least six times. Finally, they said that were apologizing for wasting my time.

Bivol: There are doubts about connectivity, your connectivity with “Agromah” through “Roads Plovdiv”. How would you comment?

L.L.: I have worked at the Plovdiv Fair as technical director. Meanwhile, Mr. Gergov was principal there and owner of the company “Roads Plovdiv”. To tell you now that I have not given advice to Mr. Gergov would mean deceiving you. I have given him advice. So what? I was not at the Agency at that time… you know… I left the Agency voluntarily at the end of 2013 and in September I started working with him at the Technical Plovdiv Fair. And I see nothing wrong and nothing damning, for example, in giving him advice to be able to sell his company. But I’ve been an employee of the International Technical Fair – Plovdiv and see nothing alarming in this, and I stand with my name. Make some research, as that Mr Markov, I do not know him, to me he came out of nowhere, literally out of nowhere. We are not a political organization, nor I ever wanted or want to be involved in politics, and suddenly… Look into finding out what foreign company he represents and what are they fighting for? When did he post on Facebook, although I do not have a Facebook profile?

Bivol: On March 9.

L.L.: See when the notice for the toll system in Bulgaria came out and you will see what it was.

Bivol: But there is an earlier publication, from a few months ago.

L.L.: Well it’s about that. See the date of our prior notice that the toll system will not be given on concession, but the State will make it in order not to give away some money to other companies.

Bivol: You see this publication as a kind of attack from the company?

L.L.: I see nothing; I am only giving guidelines; I am not connecting anything; I say nothing.

Bivol: You said that there are many such loan assignments, what is their amount?

L.L.: You are welcome in the Agency; I will pull out all of the documentation, it is public; I do not see anything that needs to be hidden.

In conclusion, Eng. Lazar Lazarov confirmed what he told other media – that he has filed on Saturday, March 12, lawsuits for defamation against Boris Markov.

The notice for the toll system for 200 million levs was sent on February 19, 2016, the target date for the start of award procedures and duration of the contract is April 11, 2016. Bivol did not find public information about the RIA decision not to conduct a public tender for the toll system and not to award a contract. Boris Markov insists that he had been talking about the subject for four months. The specific post on Facebook, with which he opened the front against Lazar Lazarov, is dated March 9, 2016.

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