The company “Bulmarket DM” Ltd., whose cargo train exploded Saturday morning in the Bulgarian village of Hitrino, inflicting huge damage and causing numerous fatalities and injuries, is owned on paper by the unemployed Cypriot national Georgios Georgiou. The man has close connections with the owners and majority shareholders in private lender First Investment Bank (FIB), Tseko Minev and Ivaylo Mutafchiev (the latter also known by the codename agent “Kamen” of the former sinister Communist secret services – State Security, DS).
“Bulmarket” is indebted to FIB with over 50 million euro and is owned by Cypriot offshore companies. Behind them stands Georgios. These facts have been known for two years already, when Bivol conducted an extensive investigation into the loans granted by FIB. It emerged then that over 1.2 billion levs have been granted to companies whose end owners are Cypriot offshore companies and Georgios Georgiou is behind them.
Bivol’s investigation revealed that the Cypriot has sold shares in FIB to Tseko Minev and Ivaylo Mutafchiev years ago. On paper, he is also the manager of “Framas”, a subsidiary company of the Bank.
According to data in the Bulgarian Commercial Register, “Bulmarket” belongs to “Vectra Consult” Ltd., which is 100% owned by “Burundi Services Limited”.
Кипърската офшорка “Бурунди сървис лимитед” се управлява от Георгиус Георгиу и е собственост на две други негови фирми: Len Secretarial и Din Nominees. Данните за тези фирми с приложени документи от кипърския търговски регистър може да бъдат проучени в специално създадения за нашия проект сайт.
The Cypriot offshore company “Burundi Service Limited” is managed by Georgios Georgiou and is in turn owned by two of his other companies: Len Secretarial and Din Nominees. Data about these companies, with attached documents from the Cyprus commercial register, can be examined on the site especially created for our project.
On paper, Georgios is the owner of Bulgarian big business, worth over 1.2 billion levs, which is roughly equal to the hole in FIB, recorded in a classified report of the central bank (Bulgarian National Bank, BNB) at the end of 2011 and in another one from the end of 2014. This was also confirmed by the prosecution. Georgios is the owner of the now-closed giant steel mill Kremikovtzi, the Lead and Zinc Plant Kardzhali, the taxi cab company OK’Supertrans, of Bulmarket, Yulen and Vitosha Ski and many other companies all of which have been financed through loans from FIB.
A team of Bivol was able to talk to Georgios a year ago. He lives in a modest basement apartment in the suburbs of Nicosia. He did not meet us in a tuxedo and with a cigar in his mouth, as befits a billionaire, but dressed in shorts and an old T-shirt with a hole in the middle.
Multimillionaire Georgios Georgiou lives here, in the basement of this building.
“I do not know what to tell you. What companies? I do not understand what you’re talking about,” he kept saying to questions about his companies in Bulgaria.
Of course, Georgios is not a billionaire; he is a dummy of the Bank’s owners Tseko Minev and Ivaylo Mutafchiev, who keep advancing their own personal business and syphon funds to offshore destinations. The money of citizens who have deposits in FIB is being drained and invested. When the hole becomes too large to bear, FIB then receives State aid through taxpayers’ funds. Part of it also goes in the form of loans to Georgios.
All this is detailed in a decree of the Prosecutor’s Office, but it sees no crime and no problem. The facts are known to the BNB, the National Security Agency and all the institutions that are supposed to end the scheme. However, it is still in place and no sanctions have been levied because companies related to controversial lawmaker and media mogul, Delyan Peevski, are FIB’ major borrowers. Peevski transferred all his loans there just before the collapse of Corporate Commercial Bank (CCB).
The breaking of this vicious circle is predetermined. CCB operated in the same way, but through Bulgarian dummies. Banker Tsvetan Vasilev (CCB former majority shareholder) has already explained in several interviews that the shell companies were called SPV (Special Purpose Vehicles). The offshores, listed to dummies, are usually needed to bypass legal restrictions for lending to connected parties. The aim of this exercise is to circumvent the law and make the BNB believe that the money of the depositors is not going to private accounts and it is not used to finance the business ventures of the owners of the bank.
Connected lending is one of the main shortcomings of banks with Bulgarian owners, mentioned in a cable of the American Ambassador in Sofia on the Bulgarian banking system in 2006, which was leaked by Wikileaks. When Bivol published the cable, our media became subject to unprecedented pressure from the BNB over a formal complaint of four Bulgarian banks: CCB, Central Cooperative Bank, FIB, and Investbank, all mentioned in the report.
The major problems in the Bulgarian banking system include money laundering by Bulgarian and foreign criminals and connected lending. A previous concern, non-transparent ownership, has been largely addressed through legislation limiting the numerous offshore companies registered as bank shareholders and consolidating the banks’ ownership structure. Connected lending continues to be a problem among some banks as their owners funnel money to related – less competitive – companies, with no intention of repaying. This leaves legitimate investors and account-holders holding the bag when bad loans go uncollected, Ambassador Beyrle wrote in the classified cable.
The above is an exact quotation, only the bolding has been done by Bivol’s editors.
This post is also available in: Bulgarian