Dubious Bulgarian Businessman Hid 40 Million Euro in a Panamanian Offshore Mind the horns!

Over 81 million levs have been proven so far to be in accounts of offshore companies of controversial Bulgarian businessman Nikolay Banev. The secret companies of Banev and his wife were disclosed by the Bulgarian 24 Hours daily, a media partner of the International Consortium of Investigative Journalists (ICIJ) in the project #PanamaPapers. However, the amount of this hidden money was not disclosed by the newspaper, which is the only with access to the documents.

In a previous investigation, Bivol revealed that one of Banev’s offshore companies Huntley Overseas TRADING CORPORATION was used to bankrupt another company of Banev in Bulgaria. This happened through a lawsuit for $ 2 million, upheld by notorious judge Rumyana Chenalova in case 455/2013 on the dock of the Sofia City Court (SCC). The aim of the operation was not returning the money to the State that Banev owed due to a privatization contract.

It turns out that judge Chenalova confirmed yet another claim by the same offshore company, this time for the impressive sum of 40 million euro. This happened with a ruling in another case – number 4008 from 2013 on the dock of SCC, which was also filed by Huntley and has been again “randomly” distributed to judge Chenalova.

By ruling 1450 from March 11, 2014, Chenalova agrees that there was evidence of credit of 40 million euro granted by Huntley to Polimeri (Polymer) Invest for which Financial Clearing House Skonto Sussex had issued a promissory note. She imposed a lien on Polimeri Invest and appointed as temporary trustee Hristo Hristov.

The case continued to drag on for another two years with Huntley (owned by Banev) trying to block the public sale of assets of the bankrupt Polimeri JSC with which to satisfy creditors – the workers and the State. The debt of Polymeri JSC only to the National Revenue Agency (NRA) amounts to 5 million levs; the one to the Nuclear Power Plant (NPP) Kozloduy exceeds 10 million levs, interest included. Ultimately, the case was finally terminated in February 2016 by the Varna District Court, where it was sent on grounds of jurisdiction, according to information about the progress of the case in the SCC information system.

#PanamaPapers Dubious Bulgarian Businessman Hid 40 Million Euro in a Panamanian Offshore

Judge Chenalova told Bivol that there was no way to determine who is behind offshore companies. The Court can only verify whether the documents of the company and the representative power of the proxies are in order. Regarding the “accidental” allocation to her of two cases involving the same offshore company, she said she had no explanation for this phenomenon. The “not so random” allocation of cases in the SCC has long been in the crosshairs of critical reports of the European Commission on the judicial reform and an investigation of Bivol proved mathematically that there is nothing random in this allocation.

Where did the money come from? “Red briefcases” with Czech-Panamanian trail

Nikolay Banev privatized Polimeri JSC in the mid-90s with the Fund “AKB – Fores”. It was credited through a Czech company by a small Czech bank “Foresbank” which no longer exists. The Fund never repaid the loan.

The Czech Center for Investigative Journalism, which is a partner of Bivol within the network of the Organized Crime and Corruption Reporting Project (OCCRP), discovered information that the same bank was involved in suspicious transactions and has granted loans to the Czech-Panamanian Chamber of Commerce, thus the Panamanian connection becomes even more obvious.

“The Czech bank held the money of the so-called “foreign companies.”

That is what Bivol was told by a source from the former Communist State Security (DS) on condition of anonymity. He confirmed the thesis about Banev’s “red briefcase” (a metaphor used in Bulgaria when referring to the story about the DS millions being distributed to certain individuals) passing through the Czech Republic. According to the source, the money had been given to Nikolay Banev to develop production in Bulgaria. Banev failed to fulfill his part of the deal and decided to focus mostly his own well-being.

The existence of 81 million levs in Banev’s offshore accounts at the same time when his enterprise in Bulgaria was piling up debts and became insolvent speaks about a simple scheme of classical criminal draining: the revenue from the company production went into Banev’s private offshore accounts instead of investing back in the plant and in the development of the production.

The result is known – destruction of a profitable plant, huge debt to the State and over 10,000 workers on the street.

A few years ago it became clear that US officials considered Banev an organized crime figure. In 2005, former US Ambassador James Pardew wrote in a cable that Banev deals with privatization crimes.

The businessman, however, had no problems with the judicial system or they were limited to numerous lawsuits against the State over his privatization obligations. Even today, Banev refuses to pay for the most lucrative real estate on the Black Sea coast that he privatized for pocket change.

After the discovery of the hidden 40 million euro belonging to Banev, there are plenty of reasons to launch legal proceedings over criminal, administrative and tax liability. However, so far the law enforcement agencies have not demonstrated interest in probing the offshore assets of the “new Eurasian” Banev and his wife.

Meanwhile, Banev already declared he was going to run for president of Bulgaria and this can secure for him temporary immunity if he can register his candidacy.

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