Before and after the company’s privatization, it continued to work with smuggler Salam Quadir Faraj
“We say that there are markets because we were approached by foreign companies who wanted to export cigarettes made by Bulgartabac Holding that would have a guaranteed market, guaranteed quantities, the necessary funds, they have documents… The companies say they have been refused trade of cigarettes,” this is what unionist Nicolas Milenkov told the State radio BNR after workers from the closed cigarette factory “Sofia – BT” rallied in protest in front of the National Assembly.
The version of Bulgartabac is that the reason for the closure of the factory was “the drastic reduction in orders, negative publicity and artificially-caused high reputational risk for Bulgartabac and its related companies”.
Officially, the majority owner of Bulgartabac is an unknown individual, but according to former banker Tsvetan Vasilev, this person is Irena Krasteva, the mother of controversial lawmaker and media mogul Delyan Peevski.
Bivol has documents that reaffirm the view of unionists that there is a market for the cigarettes of Bulgartabac. The problem is that Bulgartabac is unwilling to trade with official authorities, preferring smuggling routes passing through the distributor Salam Quadir (or Quader) Faraj AKA Farouk, whom Turkey considers a smuggler.
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As early as 2004, Salam Quadir Faraj was an intermediary and distributor of Bulgartabac for the Middle East. He was connected to the investigated for smuggling and money laundering company Caledon Invest. This is said in a letter, dated August 11, 2011 and signed by the then directors of Bulgartabac Alexander Manolev and Ivan Bilarev. At that time, the company was still State-owned.
Since July 2011, however, Salam Faraj has not been allowed to import cigarettes in Iraq; his permits were withdrawn by two orders of the Ministry of Economy of the Autonomous Region of Iraqi Kurdistan, where he registered his company as importer. This fact was also confirmed for Bivol by the official representative of the Autonomous Region in Paris.
The Iraqi is known in the region as “Mullah Salam” because of his huge wealth and influence, stemming from the control of the smuggling channels. Cigarettes of the brand “Prestige”, which are sold to him by Bulgartabac, go through an affiliate of the Bulgarian cigarette manufacturer in Dubai, managed by Ventsislav Cholakov. Then they are transported illegally in Iraq, and from there they enter Turkey, where they are sold on the black market. Part of the shipments arrives in Turkey by sea, through the port Mesrin.
The difference between the production cost and the price on the black market in Turkey is around one billion US dollars annually. PKK, and possibly other organizations, considered terrorist, are involved in the distribution of those profits by charging a fee for each shipment.
However, the contraband cigarettes imported by Salam, are also sold in Iraq, bypassing official import channels. As early as 2011, the Iraqis made a proposal to the management of Bulgartabac to sign a contract with the company Ticaret Ltd. through its representative Houtland Capital. Its representatives traveled to Bulgaria several times, but hit a wall. Their bid in 2013, when they offered to buy up to 1,080 40-feet containers with cigarettes also remained without result. The Iraqis were willing to pay for 70 containers of the brand “Prestige” and 10 containers of the brands “Victory” and “MM” monthly, as shown in documents which Bivol has (see the gallery). Moreover, the Iraqis have offered to grant a license for the import of cigarettes to a distributor company with State participation. All these proposals were ignored by Bulgartabac.
The Prime Minister was informed
The next attempt of authorized Iraqi companies to buy cigarettes from Bulgartabac happened in the summer of 2015. This came on the heels of Turkish media publishing information that the Turkish financial intelligence MASAK has identified Salam Quadir Faraj as organizer of cigarette smuggling which deprives the Turkish Treasury.
In June and July 2015, the company Ronahiya Shavi Company, registered in Irbil, Iraq, sent several letters of intent to Bulgartabac Holding. The Holding received an offer for the purchase of production for 100 million US dollars per year. In August, the proxy of Bulgartabac, attorney Daniel Penkov (former investigator) confirmed these proposals and offered to have representatives of Bulgartabac Holding visiting Iraq to check in place the company’s possibilities and meet official government representatives.
On August 24, attorney Daniel Penkov also notified Prime Minister Borisov, in which he asked him to allow the Iraqi company’s trade and economic arrangements with Bulgartabac. He complained of the refusal of Bulgartabac Holding to give an official response to the offer.
The letter claims that negotiations have been going on for over three years and attorney Penkov has repeatedly indicated to the company the need of “terminating the malpractice in the conduct of its business with the production of goods subject to excise duty tax”. “Malpractice” meant that the counterparty of Bulgartabac, Salam, was arrested as a smuggler and “for a few years has been carrying on smuggling in violation of international law, thus tarnishing the image of Bulgaria”.
Attorney Daniel Penkov also mentioned that after he sent the first letters of intent, he has been contacted by “representatives of political parties (newly incorporated) with proposals for brokering… under extremely unfavorable conditions for us, respectively the Bulgarian State”. He asked for a meeting with Borisov, but such was denied, and his signal was referred to the Ministry of Economy.
Thus, it is a fact that as early as August 2015, Prime Minister Boyko Borisov has been informed that Bulgartabac Holding has fallen into a severe economic situation which could lead to a serious social collapse that would affect not only the employees of the company, but other segments of the population as well.
All offers of the Iraqis, however, were rejected by Delyan Peevski, who is the real owner of Bulgartabac. This is because the Iraqi authorities wanted each container sealed in order to be tracked as taxable with excise duty. Obviously, these conditions have been unacceptable for the “Emperor of Smuggling” as Turkish media called Peevski.
Bulgartabac also refused profitable deals in the Middle East and North Africa
For two years now, one of the largest retailers of cigarettes – the Turkish company Consulting Limited (registered in a Seychelles offshore jurisdiction) is asking to trade Bulgartabac brands. The offer is more than reasonable – advance payment, large-volume of between 20 and 100 containers of cigarettes a month. This is a colossal amount, taking into account that just one container contains 250,000 packs of cigarettes. The Turks assume the obligation to devote 10% of their profits to advertise Bulgaria’s business in international media. A complete set of supporting documents – including available Customs warehouses, licenses, etc. has also been presented to the management of the Holding.
However, Cholakov and his mentors remain stubbornly silent, although, according to official information, the two existing factories in Sofia and Blagoevgrad have spare capacity and have even stopped production on several occasions due to financial difficulties.
Simple estimates show that if such contract was to be signed, it would have placed the local cigarette production, together with the entire industry, a whole step ahead in the global industry.
Given these irrefutable facts, the question #WHO as a normal retailer would refuse such contract if there were no other “reasonable” grounds, remains open.
One of them is probably the criminal activity with Bulgarian cigarettes of Mullah Salam and the dirty billions generated by this system. As we have already mentioned, the “black” profit from only one box of sold contraband cigarettes is roughly 1 euro. This means 250,000 euro only from non-payment of excise duty for one container. If 100 containers are sold per month, the amount reaches the skyrocketing 25 million euro or 50 million levs. A simple check showed that even in the European part of Istanbul, smuggled Bulgarian cigarettes are sold for 2,20 per pack.
Bivol has credible information that Peevski worked for the transfer of part of the real property of Bulgartabac to Salam, of course through dummy persons and proxy companies. An international independent inspection can determine whether the Mullah has acquired property against the money he gave for buying the debt of LIVERO to EFV via Dubai’s TGI Middle East FZE. According to documents that Bivol revealed in an earlier investigation, named Bulgartabac Mafia II, the sum was 59 million euro. If Salam really acquired the property, then the inaction of Bulgarian institutions such as the Commission for Protection of Competition, the Financial Supervision Commission, the Prosecutor’s Office and the National Security Agency can be defined as criminal complicity.
According to operational information, Bulgartabac has refused offers from European traders as well. The international community is commenting that the trade with Bulgartabac is more complicated than that with underground cartels and mafia structures.
Boyko Borisov’s failure to take a stand and act, after being repeatedly informed about the shady practices of the tobacco holding is more than indicative. Nowadays, however, the magnitude of the smuggling is times greater than the contraband from the illegal factory near the Black Sea coast, where the current Prime Minister was co-owner and co-president of the company manager “Teo International”.
More on the topic in Bivol:
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