“Independent” stands defending the state bank are provided by a former prime minister and a jurist who has been granted a credit by its director Bilyan Balev
The Public Prosecutor’s office has not found any violations in relation to the signal of the Anti-Corruption Fund (ACF) for breaches of the law with regard to the credit granted by the state Bulgarian Development Bank (BDB) to companies of the businessman and a member of the Executive board of the Bulgarian Socialist Party /BSP/ Georgi Gergov and his family. The credits amounted to 31TIME.8 million Euro and were granted in the end of 2016 in favor of “Mezhdunaroden Panair Plovdiv” JSC and “Slanchev Den Residence” sole owner JSC, which is associated with Georgi Gergov’s family.
What does “political parties and individuals associated with them” mean according to Sofia District Attorney’s Office?
Upon the prosecutor’s inspection, the BDB leadership provided legal opinions, according to which, pursuant to the definitions of the Commercial Law, the companies of Gergov’s family and BSP (Gergov was a member of BSP’s board of managers as of the moment of the granting) were not related entities. “Georgi Gergov’s factual affiliation with BSP is legally irrelevant because he, being a physical person, a member of a political party, has not been granted a credit”, the prosecutor’s decree points out.
According to the Anti-Corruption Fund jurists, however, the applicable definitions in this case are the ones of the Law on Credit Institutions, which are much broader and refer to the explicit prohibition in the statute for “granting credit to political parties and individuals associated with them”. The application of a much narrower interpretation to the Commercial Law is manipulative and does not comply with the perfectly clear restriction in the bank’s statutes. This limitation sets a clear obstacle before granting credit to companies owned by politicians, which, according to the current resolution of the public prosecutor’s office, turns out perfectly legal, the ACF legal center comments.
(According to the Commercial Register, some amendments in the BDB statutes,which are in the spirit of the stands submitted to the Public Prosecutor’s office, were enacted on 4 December 2017. They clearly specify that only the women’s, youth’s and other organizations, established by the political parties themselves, are considered entities affiliated with those political parties.)
Two legal stands – both of them issued by politically-affiliated jurists:
One of the legal stands, commissioned by BDB and submitted to the public prosecutor’s office, had been issued by Prof. Ognyan Gerdzhikov, a lecturer at the Law Department of Sofia University and a provisional prime minister in 2017, appointed by the President Rumen Radev. The independency of such a stand, however, is extremely controversial from a legal point of view because the originator occupied the position of a provisional prime minister in the period January – May 2017 and his ministers exerted direct control both upon the state bank, and the company the credits were granted to. Some of the legal actions the signal referred to were conducted in that period, too.
The other legal stand, provided to the public prosecutor’s office, was issued by Rosen Karadimov, from the same department (editor’s note: Karadimov is an ex-chairman of BSP’s youth organization and a counselor of the prime minister Stanishev), and also benefited the state bank. It is interesting to note that, according to the financial reports of the British company FINNIVEST LLP (100 per cent owned by the CEO of the bank as of that moment – Bilyan Balev), Karadimov was granted a personal credit amounting to 114,480 British pounds, which seriously questions the independency of the legal stand given in BDB’s favour.
The issued decree, which enacted a refusal, does not bear evidence of any individuals interrogated, except for the persons who had sent the signal, and all the remaining stands from BDB and the company that had been granted the credit were collected in a written form.
The Public Prosecutor’s office has not detected any violations of the law in the remaining items pointed out by the signal, including the fact that a credit was granted to “Mezhdunaroden Panair Plovdiv” /MPP/ without its annual financial reports having been approved, as well as the lack of approval of the company’s General Assembly in case of credits granted in favour of third persons, as the case with the credits intended for MPP is.
The Anti-Corruption Fund’s legal center states it will appeal against the decree enacting the refusal to conduct pretrial proceedings before a higher instance. “We can hardly expect from a centralized structure, such as the Public Prosecutor’s office, to find sufficient grounds for starting pretrial proceedings against a person who has publicly declared he is on close friendly terms with the chief prosecutor”, comment the jurists from the legal center.