How Private Lender CCB Stole Petrol

State institutions complicit in the "dirty" scam; cooperated with CCB’s majority shareholder Tsvetan Vasilev
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The seizing of fuel distributor Petrol by the now-collapsed Corporate Commercial Bank (CCB) at the end of 2013 happened through a real criminal scheme in violation of several laws and even of a Court order. This is revealed in documents which Bivol obtained. All institutions – the Prosecution, the central bank (Bulgarian National Bank, BNB), the Central Depository and the Financial Supervision Commission (FSC) have been alerted, but are complicit through inactivity.

In addition to CCB as lender, an especially established dummy investment firm, the former CEO of Petrol, a private law enforcement officer and even the Central Depository were also included in the scheme.

At the end of 2013, the long-lasting legal battle between Mitko Sabev and Denis Ershov for control of Petrol was nearing conclusion. On November 13, 2013, a new Board of Directors of Petrol Holding was registered. Denis Ershov remained CEO, Mitko Sabev and former Executive Director Orlin Todorov were thrown out of the Board. They were exposed in the preparation of false documents and even forgery of signatures. Before being removed, the former executives have set mines that exploded only a month and a half later.

In the evening of December 2, 2013, the real owners found out with dismay that the shares of Petrol Holding JSC in Petrol JSC have been removed and sold on the stock exchange by the infamous private law enforcement officer Marian Petkov. Petkov has launched a speedy enforcement case against Petrol Holding due to debt to CCB of which the company was not aware.

On the planned day, the price of the shares was specially lowered on the stock exchange about 4-5 times. The dramatic drop in the course of several hours was used for their targeted purchase by a company closely connected again with CCB. During the day, two small transactions with packages of shares were concluded that lowered their price and shortly before the closing of the stock exchange, the company Alfa Capital, connected with CCB, acquired the basic package of 51.5 million shares against two levs per share. With what money? With a loan from CCB granted and sealed on the same day for 101,349,481.01 levs. In fact, this vicious transaction was carried out by CCB, through CCB and with CCB from all sides.

So, all 51,900,352 shares of Petrol Holding in Petrol JSC (47% of the capital) become practically a controlled property of CCB’s majority shareholder Tsvetan Vasilev for the amount of 103,813,928.52 levs. The creditor, the intermediary and the buyer are actually one and the same entity.

Setting the trap

How did things get there? The preparation of the terrain was done in secret a few months earlier. On April 11, 2013, the company OIL ENERGY TRADING LTD, with owner Tsvetan Hristov Genov, was created in Varna. The man is absolutely unknown, but is close to parties and companies directly connected with the previous management of Petrol. The founding capital of the tiny company of 5,000 levs was deposited in Investbank on the same day.

Only a week later, on April 19, 2013, CCB granted to OIL ENERGY the enormous sum of 16,239,551.69 euro. It should be noted that OIL ENERGY TRADING LTD is a company without any financial history, no registered property, securities or any assets. Given its only five-daily legal existence prior to the date of signing the huge bank loan with CCB, this is more than telling. There is no way for such credit to be repaid or serviced, and it was not. BNB’s Supervision has not reacted even once to such actions of the collapsed bank. Granting huge loans to dummy companies with no collateral has been a specialty of CCB, as became clear after the collapse of this “bad apple”. The specific goal in this case was not a direct drain, as the next steps will show.

On July 22, 2013, the then-Executive Director of Petrol Holding JSC, Orlin Todorov, signed a contract to enter into debt to CCB, as a guarantor for the loan of OIL ENERGY. Under the Charter of Petrol Holding, this is a crime. The guarantee for the amount under the Loan Agreement and the assumption of debt in a very large amount in favor of OIL ENERGY TRADING LTD without a financial risk assessment and without the knowledge and judgment of shareholders and without the knowledge and a decision of the Board of Directors is an indicator for an unprecedented act, leading to deliberate draining of the assets of Petrol Holding JSC. At the same time, the company’s accounts were frozen by a private law enforcement officer. This way, the company became entirely and without reason and against its own interests a guarantor for the debt of 16 million euro of OIL ENERGY to CCB. This happened over the heads of the shareholders, who were not at all familiar with Todorov’s actions. No documents, dates for outstanding maturities of the obligations, credit reports, contracts and annexes to the credit file have been submitted for this transaction. The managing body was in total information blackout about this move. Even at present time, the contract in question has not been presented in the company.

The “sleeper cell” was formed. Sabev, Orlin Todorov and Co were removed with legal proceedings on November 13, 2013. The very next day – November 14, 2013, the bomb, set by them and Tsvetan Vasilev, was activated. Pledge N ° 5847-X-14.11.2013 was registered in the Central Depository, with which the shares of Petrol Holding in Petrol became collateral for the debt granted by CCB to the dummy company OIL ENERGY. It should be noted that the company was subsequently bought and became wholly owned by companies connected to Tsvetan Vasilev – Sagara Trade. How brilliant – you lend to yourself and your lemon in a large company such as Petrol guarantees the loan. Then you don’t repay the loan granted to you, but you trigger an early request to the guarantor and a swift enforcement case. All this happens under the nose and even with the complicity of the responsible supervisory and regulatory authorities in the State. Here is how things developed in this story, which reveals that indeed CCB and Tsvetan Vasilev were actually part of the State. The corruption is astounding.

The trap closes

From that moment on, the further development resembled acute leukemia – CCB suddenly and unilaterally asked for early repayment of the loan and played its trump card. On November, 2013, the Executive Directors of CCB, Georgi Hristov and Alexander Panteleev, sent a formal notice for voluntary compliance to Petrol Holding JSC to repay the amount of 16,239,551.69 euro. This was actually the loan granted to the bogus OIL ENERGY. CCB executives informed the unsuspecting Petrol Holding that within just one week it must repay this amount to the bank. The formal notice was filed by CCB with number 7137 / November 28, 2013, and was received on the next day – Friday. Regardless of the established week-long deadline, CCB had no intention of waiting. On the very same day, Friday, November 29, 2013, private law enforcement officer Marian Petkov issued, sent and got back all the way from Stara Zagora, a notice of the start of proceedings on the request of CCB against Petrol Holding. He listed the notice as returned because the addressee was “not found”. His actions are classified as intentional and unlawful by the management of the company in their Report to the Inspectorate of the Ministry of Justice and the Chamber of Private Law Enforcement Officers. “Nobody had looked for representatives of Petrol Holding in Stara Zagora to serve them with a notice,” the company is firm.

On that same Friday, November 11, 2013, (the last day of the work week was purposely selected), five more formal notices, asking for early repayment of amounts totaling more than 100 million levs from subsidiaries, one of them Petrol, were swiftly prepared and sent to Petrol Holding. All sums had to be transferred in the accounts of Corporate Commercial Bank. Documents and credit records for the requested amounts are missing. All notices were blanket ones and were certified by the same notary Mila Eneva and at the same time, which clearly speaks of an organized action. The enforcement cases were united in one. On the next work day, December 2, 2013, Petkov sent an order to the Central Depository for the lifting of the freeze of the company’s shares that were of interest of CCB. The private law enforcement officer proceeded with execution of the order. Please note that the notices arrived on the last day of the week (Friday) and as early as Monday, December 2, 2013, the private law enforcement officer notified the Depositary that the shares have been sold -remarkable speed and synchronization of actions.

The shares were emitted for sale, but at much lower prices. A transaction for the sale of 51.5 million shares was registered. The total number of shares in Petrol was 51,900,352. The price determined by the intermediary was the symbolic 2 levs per share. Following the stock values of Petrol’s shares clearly shows that the prices before and after the day of the sale were much higher. They were lowered on purpose at this precise moment in order to buy out the share of Petrol Holding in Petrol, which actually held the material assets themselves. Was this a market manipulation on the regulated market? According to the FSC, it wasn’t. So, by the evening of Monday, December 2, the shares already belonged to the subsidiary, owned by Tsvetan Vassilev. Assets worth over 600 million levs were acquired for just over 100 million levs. Such profit in just a few hours is worthy of the annals of Wall Street!

Pirate complicity

Literally minutes after the pirate transaction, the Director of the Holding, Denis Ershov, alerted the Chairman of the Financial Supervision Commission (FSC), Stoyan Mavrodiev, with a copy to the Executive Director of the Bulgarian Stock Exchange, Ivan Takev.

“Dear Sirs,

We just learned that the shares in the capital of Petrol owned by Petrol Holding” JSC have been traded (sold) on the Bulgarian Stock Exchange.

We inform you that this transaction is based on false and falsified documents, most likely anti-dated contracts or forged signatures, and carried out in violation of the Charter of the company… Because we believe that document fraud has been committed by the previous management of Petrol Holding JSC, we ask for your immediate intervention to prevent any disposition of the shares of Petrol Holding JSC until the case is clarified.

Please also provide to us the originals of the documents on the basis of which the transaction was executed so that we can familiarize ourselves with them.

We will immediately inform the competent authorities about this document fraud,” is written in the signal.

The desperate requests and signals from the victims, burned in the CCB fire, did not move Mr. Mavrodiev. He deigned to respond formally… four months later. Like calling the police to alert for an ongoing murder and the officer on duty calling you back three months later to notify you that there was no available cruiser! At the end of March next year, Stoyan Mavrodiev returned a “timely” response on behalf of the FSC, signed by the notorious Vladimir Savov. He explained at length that the FSC has not found any violations in the pirate and swift sale of shares, despite FSC being also alerted by an order of the Court! FSC has done its job perfectly.

As the FSC was not reacting, the last obstacle to the transfer of ownership in the hands of Vasilev was the Central Depository, which shall register the transaction. The actions of the private law enforcement officer were immediately referred to the Court. On December 4, 2013, the District Court of Stara Zagora definitely ruled with an order № 1365 / 12-4-13. The Court found that the shareholders’ rights could be violated and issued a protective order to immediately stop the disposition of the shares. A copy of the Court documents was provided to the Central Depository on the same day, given the need of urgent measures and actions.

Executive Director Vasil Golemanski, however, was not moved by the act of the Bulgarian Court and stated that the deal will not be stopped. Petrol then officially alerted BNB and the Prosecution, but in vain. The claim, logged in the Sofia City Prosecutor’s Office against Golemanski, for de facto complicity remained unanswered. At the end of 2013, a formal signal to Chief Prosecutor Sotir Tsatsarov followed. It emphasized that the Holding that became the victim of fraud employs over 4,000 people and its scope of activity was of strategic importance for the entire Bulgarian economy. It was explained that the company is one of the largest taxpayers in the country and the absence of actions by the Prosecution regarding the offense will lead to even greater illegal actions, pushing the company in deliberate bankruptcy. The Chief Prosecutor was urged to intervene and assist in the launch of a timely and quick prosecutor’s investigation and to react to the misuse of securities for over 100 million levs, carried out on the Bulgarian Stock Exchange etc. Has someone heard a fish talking? This was the extend of Tsatsarov’s response to the claimants.

Vicious techniques and connected parties, the loans to dummy companies and document fraud failed to move any institution. At the time, CCB was still a “sacred cow” and Tsvetan Vasilev was the four-time holder of the title Banker of the Year in Bulgaria. It is interesting to investigate the synchronized inaction of all alerted institutions in charge in the country in this frank, demonstrably fraudulent, pirate CCB scam. But who was there to investigate – BNB Governor Ivan Iskrov to investigate himself, or Tsatsarov? At that moment these sorry people did not suspect what will happen a few months later with the bank and the banker. To whom do these corpulent officials and institutions, weighing on taxpayers with costly allowances, owe an explanation?!

In March 2014, Prosecutor Damyanova from the Sofia District Prosecutor’s Office terminated the pre-trial proceedings against the former manager of the Holding, Orlin Todorov, with decree № 110/2014, without having completed the investigation and without having taken into account the seriousness of the documents in the case file. The prosecution failed to undertake any action to search the company documents of Petrol Holding JSC. A cover-up for evidence that emerged in the process of questioning witnesses was created. The file of OIL ENERGY TRADING LTD and of Petrol Holding JSC in CCB was not checked, despite the explicit signals of the victims for lack of documents and great likelihood of anti-dated and forged documents. Bank employees have not been questioned. The cash flow – in which accounts is has been deposited and where it was diverted – was not traced. The harmed person was not even aware of the prosecutor’s refusal. The decree of the prosecution was revoked by a rule of the Sofia City Court. It, to put it mildly, ridicules the inactivity of the prosecution. But it was already October.

The institutions were not aware of CCB? Yes, but no!

While the case was dragging in Courts, some reversals occurred in the banking system. CCB was closed and long lines formed in front of its branches. Iskrov and the group around him desperately tried to justify themselves before the rolling cameras and made the rounds of television studios in an attempt to convince the public that everything that happened “came as a surprise to the government”.

The findings of Bivol are the first ones to shed light for the public about the hitherto mysterious case with the shares of Petrol and categorically refute this talking point. On the contrary, these same individuals have been informed in detail and quite formally about the methods of CCB – about the dummy “mailboxes” with huge loans to connected companies, as well as the use of insider information in stock exchange transactions in order to appropriate and for personal gains.

Instead of conclusion

The shares of Petrol were “purchased” through racket at a ridiculously low price by companies connected to Tsvetan Vasilev and CCB. The prosecution, BNB, the Central Depository and the FSC were aware of the draining scheme and the practices in CCB as early as December 2013. No one and in any way, in their capacity of State representatives, reacted to what was happening. The evidence presented to them included valid information on corrupt practices in CCB through which the bank was drained. They have been informed that the same techniques were used in the acquisition of foreign assets through fraudulent methods with connected parties, dummy companies and empty documents.

Undoubtedly, the State knew what was happening as early as the beginning of December 2013. The Prosecution was notified. FSC and BNB were notified as well. There was plenty of time to react. But there was no will to stop the theft, not only the theft of Petrol, but the subsequent colossal drain of the capital of the bank, of those billions that our rulers slammed on us to pay to the detriment of our quality of life for many years to come. Why?

The protagonists

Tsvetan Hristov, the creator of Oil Trading, was manager of Naftex Petrol LTD, one of the subsidiaries of Petrol JSC from September 2011 until the end of January 2013, a check in the system Daxy shows.

The longtime CEO of Petrol Holding, Orlin Todorov, currently has no ownership and participation in the management of companies.

CCB collapsed miserably days after BNB announced that the bank is well capitalized and stable.

On January 6 this year, Alfa Capital has asked to be declared insolvent due to its inability to repay the loan to CCB for the purchase of Petrol that became due early, on November 13, 2014. Later, the company sold the acquired by it shares in Petrol Holding to other companies connected to Tsvetan Vasilev and CCB.

Denis Ershov was expelled from Bulgaria together with Michael Cherney, but managed to successfully challenge the measure in Court and returned. According to a US diplomatic cable on Bulgarian organized crime, Ershov and Cherney were suspected of common criminal activity.

Bivol will continue to follow the subject of the largest corporate thefts in the history of Bulgaria.



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