Two years passed since the collapse of Corporate Commercial Bank (CCB), preceded by a conflict between its majority shareholder, banker Tsvetan Vasilev, and lawmaker-investigator-former chief of the National Security Agency (DANS)-media mogul Delyan Peevski. For years, this team operated with the lion’s share of the State money deposited in the bank, which was the darling of all governments. This was used to capture key assets such as Bulgartabac and Vivacom. In reality, these two men were the personification of the backstage rule in the country that brings together all institutional, media and financial power.

Their divorce came unexpectedly and caused a major shock in the system, but the worst consequences were suffered by the depositors in CCB and the entire Bulgarian society. At the height of the conflict, Peevski transferred the loans of companies connected to him from CCB to First Investment Bank (FIB) and the public Bulgarian Development Bank (BDB). He subsequently cleared his debts to his former partner and tried to cover up all traces of their joint business.

In the attack on his until-recently financial creator, Peevski also actively used the “independent” Prosecutor’s Office. CCB asked for help from the State, but faced instead strong reaction by the central bank (Bulgarian National Bank, BNB) and the prosecution. Until then, they were completely oblivious to what was going on with it and in the aftermath of the rift, suddenly discovered a number of breaches. Even the enemies of CCB and Vasilev were able to see that this was a backstage scenario with the lawmaker from the party largely representing Bulgarian Muslims – the Movement for Rights and Freedoms (DPS), Delyan Peevski, being the main protagonist.

The result of this frontal attack was CCB’s quick collapse, and the waning money of its clients. A few days later, FIB also asked for help from the State and received it without restrictions. CCB’s troubles were paid by all taxpayers through loan. Meanwhile, the model #WHO continued to exist as a parasite, moving from one donor to another. The reasons for the rift between Tsvetan Vssilev and his favorite Delyan Peevski can be the subject of a separate publication and analysis.

Currently, we also mark five years since Bivol published the cable of the former American Ambassador John Beyrle about the Bulgarian banking system, which lists the banks “bad apples” that funnel money for known criminals in money laundering schemes and are involved in connected lending. In 2006, the cable listed as such banks FIB (Tseko Minev and Ivaylo Mutafchiev), CCB (Tsvetan Vasilev), Central Cooperative Bank (Ivo Kamenov and Marin Mitev from TIM) EIBANK (Borislavova), DZI (Emil Kyulev), Investbank (Petya Slavova), Municipal Bank (Hristo Kovachki) and International Asset Bank (Mladen “Madzho” Mihalev). The names in the parentheses are of their then-owners. How many of them will survive in the current stress tests will become clear in July.

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Emanation

After a series of revelations about Peevski’s shady business, mostly related to cigarette smuggling in the Middle East, uncovered by the Turkish authorities, two consecutive and connected events took place: 1. Bulgartabac also went into bankruptcy; announced that it was ending the export of cigarettes to the Middle East and closed its factory in Sofia and 2. Prime Minister Boyko Borisov officially announced, as a true spokesman for Peevski that the latter has left the country.

However, this “departure” looks more like a large-scale restructuring. In recent weeks, not a day goes by without the announcement of some new circumstance associated with the business of Delyan Peevski, his mother Irena Krasteva, or companies that otherwise are “not theirs”. The direct ownership of Peevski is concentrated in his media empire, officially inherited from his mother; in Technomarket and in Dubai-based offshore companies with vague business. The companies from the construction sector – “Vodstroy 98” and “Industrial Construction Holding” – changed hands. It seems that these tectonic processes are not yet completed because the control of “PST Group” has not changed. For now.

The money trail


But what about the money? A research, conducted by Bivol, established that the debts of companies related to Peevski amounts to about 280 million levs of which at least 230 million are in FIB. Not all loans are serviced.

The champion by exposure is PST Group with 130 million levs. Of these, 71 million are attributed to acquiring a debt of 103 million levs through a mysterious loan assignment. Despite these impressive amounts, the company was granted a new credit line of 55 million levs. There is also a bank guarantee for 21.5 million levs. All this suggests that if in the coming months PST Group does not receive a large public procurement, it is going to sink, along with the creditor bank – FIB.

Sibole Services Incorporated, which was the majority owner of Technoexportstroy, has active loans in the amount of 70 million levs, of which 29 million have been used. The exposure of FIB to the company is 22.5 million levs and this is a total loss.

Technoexportstroy, in turn, has a modest 3-million-levs exposure, but the company has stopped servicing them and these loans are also a total loss.

Industrial Construction – Holding has used loans in the amount of 31 million levs, and still has to pay 16.4 million levs.

Vodstroy 98 has used 65 million levs and still has to pay 30.7 million levs. There is a bank guarantee for 55.5 million levs. These loans are from BDB.

Other companies, related to Peevski, have covered their debts to CCB through a packet of loan assignments in FIB. As financial journalist Miroslav Ivanov wrote as early as November 2014, these are Tabak Market, owner of Lafka (34 million levs,) Droslian Bulgaria (16.8 million levs) and Villas Vist (10.4 million levs).

Hermes Solar, which built the Seraglio of DPS Honorary Lifetime Chairman, Ahmed Dogan, in Rosenets, has an exposure of 18 million levs that has been moved from CCB to FIB through a direct payment by the latter. There is no evidence that this loan is being serviced in any way.

Crime and corruption without criminals and corrupt people

The total amount that the person “who went abroad” has left behind in the form of debt is nearly 280 million levs, of which 250 million are in the “bad apple” FIB. However, this is rather the absolute minimum, as the loans to companies around Bulgartabac Holding are not known. They have yet to be brought to light.

The fact is that most of these loans are currently considered non-performing and are under supervision. That does not particularly bother the BNB banking supervision – a known behavior of the central bank that led to several fatal bank collapses during the transition period after the fall of the Communist regime.

To date, this “ostrich policy” has not at all changed. BNB is firmly following the infamous line of conduct, known since the days when Ivan Iskrov was its Governor and its declarations of transparency, integrity and strict application of laws and rules remained just such – declarations. Neither the previous, nor the new leadership of the central bank, responded adequately to the documented and detailed information, provided by Bivol, on nearly 1.2 billion levs given by FIB to some destitute Cypriot named Georgios Georgiou. FIB has a huge exposure of 300 million levs due to a loan granted to energy mogul Hristo Kovachki, best man of banker Ivaylo Mutafchiev. There is no surprise that some 250 million, loaned to Peevski, are not alarming for the otherwise omniscient surveillance?

To date, BNB keeps deliberately ignoring our media’s official signals, supported by irrefutable evidence and documents. The question is whether an institution acting in this manner should be treated as an accomplice! Moreover, this is the same scenario as in the case CCB.

Comment by Bivol from 2011

“It is alarming that instead of limiting the bad practices and fighting white collar crime, the Bulgarian State is pouring public resources in some of the “supervised” banks and is tolerating lawlessness.”

A comment that is not only prophetic, but even more relevant today.

 

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