How the Bulgarian Development Bank Violates its Statute and the Country’s Banking Rules

The Anti-Corruption Fund Foundation (ACF) has uncovered serious violations by the Bulgarian Development Bank (BDB) with regards to credits, worth EUR 31.8 mln., given to International Fair Plovdiv JSC and Sunny Day Residence JSC.

The credit violations contradict the statutes of the two companies, as well as banking rules in Bulgaria. ACF has sent reports to the Bulgarian National Bank and the public prosecution, while copies of the reports wete also sent to the government ministries, tasked with oversight of the companies.

The decision to finance the two companies violates the BDB statute which clearly prohibits lending money to political parties and persons related to them. The two companies are controlled by Georgi Gergov, a member of the upper ranks of the Bulgarian Socialist Party, and his family.

The two companies are the biggest BNB lenders. ACF is keen to receive an answer to the question whether the loan decision is exposing the bank to any financial risks and threatening its stability.

Five months after ACF had filed its reports, the prosecution replied it did not find grounds to initiate pre-trial proceedings.