Bivol reported Friday that the Bulgarian Central Bank (Bulgarian National Bank – BNB) will probe information and evidence that private lender First Investment Bank (FIB) has been drained by companies with unclear ownership and falling under the Article about Connected Parties. The title was derived from an email we received and after an exchange of correspondence with the Bank. In this correspondence our media is asking a number of important questions, citing specific names of companies and figures and dates from lending agreements of FIB. The questions and the information submitted to BNB have one and only aim – to obtain adequate answers whether the information is known to the supervising Bank and whether there are or aren’t grounds for concern about a drain?
In the context of the current unprecedented situation with the brazen plundering of another private lender – Corporate Commercial Bank (CCB or KTB) – Bivol must correctly present the information it has obtained to the institution responsible for ensuring legitimate banking activity in Bulgaria. BNB has already demonstrated publicly how exactly it has been doing its job over the years, so that it allowed the drain of the most powerful until recently Bulgarian bank CCB. Everyone remembers the press release from June 17, 2014, which reads verbatim:
“BNB has detailed current data about the entire banking system. Based on this information, BNB categorically confirms that the banking system, including CCB, has high liquidity and capital adequacy and is functioning normally.”
It turned out later that the capital of CCB was drained through fictitious companies and, as it is known now, the savings of thousands of Bulgarians and the money of many companies, institutions and municipalities in the currently closed bank melted away. The audit revealed draining under classical schemes with proxies and connected companies which went on for years “under the nose” of the central bank, and which was possibly helped by its inaction. Losses amount to more than 4 billion levs and their burden will be ultimately transferred to the taxpayers. Putting the blame solely on the CCB majority shareholder Tsvetan Vassilev and his subordinates is a laughable attempt to exonerate the real culprits whose inaction makes them complicit in a colossal crime of public plundering. Bivol has the ambition to unravel in full the whole truth around the evidence it has obtained and which shows that
Institutions and persons in charge of supervision have been informed and were aware of the existing schemes to drain CCB through lending to connected or fictitious companies.
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Led precisely by our duty as investigative journalists, we turned to BNB, providing it with information that we can prove with documents. We wish to strongly emphasize that Bivol is not and in any way accusing anyone. We are neither the Prosecution nor the Court. Bivol has not made any accusations, nor has it made conclusions or claims regarding FIB. For now Bivol is only asking! The allegations and the evidence of illegal activities are within the authority of the Bulgarian National Bank and of law enforcement. But as media and citizens, negatively affected by the staged banking crisis and by the huge robbery of public funds, it is our duty to alert and to ask questions. No one and in no way can ban us form doing so or accuse us because of it. Unless the dictatorship of the oligarchy-mob has already imperceptibly settled in Bulgaria!
Well, we alerted and asked BNB whether there are reasons to doubt that yet another bank deemed “bad apple” in secret US diplomatic cables – FIB – is being drained. In addition, we reminded that this is the only Bulgarian “bad apple” bank in the report of former US Ambassador in Sofia, John Beyrle, about which he has written that “FIB is now considered to have one foot in the legitimate retail world (it is known as one of the most aggressive and polished” banks) as well as one in the murkier criminal realm”. We received an unequivocal response from BNB that everything that we have sent will be verified. We did not receive a reply that suspicions about something wrong are unfounded, nor that BNB is guaranteeing that everything with FIB is fine. We also did not receive a reply that the evidence provided by us is not of interest to BNB and it is not important enough to deserve a probe. We did not even receive a reply of refusal. Had we encountered such a reaction from BNB, we would have written a different article with a different headline. Mr. Alexander Urumov from BNB precisely and clearly replied that the information we have sent will be subject of a probe, unless he lied to distract us.
The promised probe is an emergency one because it has not been planned in advance by the BNB and it is not prompted by something like compliance with the Labor Code, for example, but rather by specific evidence related to a suspected drain. This is exactly what we published by summarizing in our article what we have sent to BNB and exactly what answers we expect from them.
Now, this same Mr. Urumov vehemently denies having stated that that there will be a probe, saying there was no emergency one and that Bivol made everything up. However, we have the email that he sent to us. In it Mr. Urumov first thanked us for the questions and the evidence, and then explicitly assured us that there will be a probe. # Who lied here, Bivol or the representative of BNB? This will be proved duly and irrefutably!
There is another possibility, however. And it is that Mr. Alexander Urumov has tried to pull wool over our eyes that they will check something in FIB, when BNB actually intended to act as it acted with CCB over the years – getting accurate information that the law has been breached, but doing nothing until the entire system explodes and then coming up with statements such as “We did not know; we did not hear or see anything! This is the main flaw of our country, rotten by corruption. Institutions or people in them, whose duty is to defend the rule of law and public interest, conceal the truth as long as possible. They know that they are protected by the presumption of impunity, simply because in Bulgaria there is no one to hold them accountable for complicity.
We do not know whether Mr. Urumov has been scolded for having corresponded with Bivol, for accepting the evidence and the questions we sent and for responding with gratitude and with the assurance that BNB will do job the law requires it to do and will check properly everything we have provided. And it is not a minor matter and it should not be ignored. In order to carry out such probe, it is necessary to open company records, indicated by Bivol, to verify the conditions under which the loans were granted; to assess whether those conditions were the legal ones; whether borrowers were connected to the management of FIB and whether there is a conflict of interest. DANS and the prosecution must establish #WHO is behind offshore owners that are listed as end borrowers and whether the granted loans were secured with assets? As Bivol knows that the Prosecution will hardly act on its own, we will approach it officially. Due to the inadequate reaction of BNB and the backslide attempt to manipulate the public, we will publish in detail the evidence submitted by us because it is of overriding public interest. We understand from BNB’s panic reaction that obviously we cannot trust at all that there will be a probe. After all, this is an option as well as it is already known for the record that Bivol has alerted those responsible and they are now facing the dilemma whether to do their job or to bury their heads in the sand.
We will approach international institutions, monitoring the level of democracy in Bulgaria, and possibly the Court, over the name calling and the threats against members of our team. BNB has already been subjected to harsh international criticism after trying to launch criminal proceedings against Bivol three years ago in an attempt to protect the “bad apples”. It was confirmed with time that Bivol was right then and BNB has ruined its public and institutional credibility. Many truths about it are yet to be revealed and it will have to provide answers to the Bulgarian and European public how come banks in the country, which is a full-pledged member of the EU, are used as a mean of mass looting.
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