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A diagram of property and correlations in the Black Sea Gardens project – to zoom in right-click and open the image in a separate window or click here.

The rights to the project for vacation village “Black Sea Gardens” of world-famous English architect Norman Foster belong to the company “BBT Projects,” owned by the owners of “Titan” (and ex owners of the CSKA football club).

Two days ago, the government gave green light to this controversial project, angering environmentalists and triggering suspicions of involvement of an influential person. It became clear that in June 2013, the project has received a negative opinion from the Financial Supervision Commission (FSC) because it did not meet criteria for first class investor.

The attention is now focusing on Georgiy Stanishev, brother of Sergei Stanishev, leader of the Bulgarian Socialist Party, (BSP), the Party of the European Socialists, (PES,) and former Prime Minister of Bulgaria. Georgiy Stanishev is partner of architect Norman Foster in the design of Black Sea Gardens. He denies any involvement and claims that since 2008 he has had no interest in the project. However, facts and documents, which Bivol has, speak for themselves.

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A document of the Financial Supervision Commission from January 4, 2013, available online (see here), reveals that “Mayfair Group” (the previous name of “Madara Europe”) has asked FSC to approve the “transfer of rights and obligations under a contract between “Madara Bulgarian Property Fund Limited” and “BBT Projects” JSC. It is noted in black and white that “the contract holds the rights to the project of Norman Foster “Black Sea Gardens” and is important for the future success of the project and therefore the company.” Meanwhile, however, the Bulgarian company was to also assume the obligation of “Madara Bulgarian Property Fund Limited” to “BBT Projects” in the amount of 3 million euros.

The registered in Jersey “Madara Bulgarian Property Fund Limited” is the parent company of “Madara Europe” and has a capital of 60 million euros, distributed among individuals, offshore operators and major Western banks (see chart). Since Thursday, its Chairman Tim Chadwick has been touring media to explain the huge benefits from this project.

The analysis of the FSC report indicates that it does not contain specific information on the rights and obligations under the proposed transaction. Therefore, FSC did not approve the transaction and voiced doubts in the project because “the presentation of economic benefit without estimates, specific data and information … leads to questioning whether or not there would be an economic benefit (from the project – editor’s note) to its shareholders.”

Once having received the refusal of FSC “Mayfair Group” was converted to “Madara Europe,” but the idea to use Norman Foster’s project was not abandoned, on the contrary – it was considered a major argument for successful sales of apartments to wealthy clients.

We read the following in a report of the Board of Directors of “Madara Europe” to shareholders: “As result of market research, the management of the company has concluded that there is a substantial market for wealthy people looking for real estate investment in Europe. Such investors have been attracted to the project “Black Sea Gardens” due to the relatively low prices, opportunities for renting and quality of the design of Foster + Partners.”

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In order to reach this conclusion, “Madara Europe” has consulted with two investment banks and has conducted extensive market research. The concrete names of these banks are not mentioned, but an inquiry in the ownership of the parent company in Jersey shows that subsidiaries of two banks have shares – the Swiss “Credit Suisse” and the American “Citibank” (see diagram).

The company was, however, aware that things were not all rosy and warned shareholders that the project can be significantly curtailed because of Natura 2000, while the building permit could turn problematic or not to be granted.

To avoid failure, the management intended to reduce the size of the project and to recruit international and local architects with extensive experience to ensure that the project “Black Sea Gardens” meets all legal requirements for obtaining a building permit.

This wording is ambiguous, at the least. In principle, the designer cannot guarantee building permit in a protected area unless there is use of illegal methods to influence institutions.

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Stanishev Brothers: We have nothing to do with this; there is no conflict of interest

The Bulgarian partner of Foster + Partners in the project for construction in Karadere is the architectural design company “Projects” of Georgiy Stanishev, brother of Sergei Stanishev. This fact was widely reported in media when the project was first presented and afterwards as well.

Just days ago, “Madara Europe” received a certificate of first class investor by the government of Prime Minister, Plamen Oresharski, appointed on the mandate of BSP, whose boss is Sergei Stanishev. On Friday, the Chairman of “Madara Bulgarian Property Fund Limited,” Tim Chadwick, told bTV that a friend in the government helped him achieve this success, but would not reveal who exactly this person is. Speaking before Nova TV, Chadwick added that he had met with the Minister of Investment Planning, Ivan Danov, and the Minister of Economy, Dragomir Stoynev. Minister Danov certainly knows Georgiy Stanishev very well as both are department heads in the University of Architecture, Civil Engineering and Geodesy (UACEG) in Sofia.

The company “Madara Europe” also claims that since 2008 Georgiy Stanishev had nothing to do with the project as architect and Sergei Stanishev even advised his brother from Brussels to sue anyone who is connecting him with the government’s decision to give green light for construction in Karadere. The former Prime Minister and current head of PES further voiced doubts whether this project is the same as that of 2007; doubts which the report of the management of “Madara Europe” to shareholders dissipates in full. Not only is the project the same, but the rights to it are subject of a contract that is still active.

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