site.btaNational Revenue Agency Distrains Tsvetan Vassilev's Assets

National Revenue Agency Distrains Tsvetan Vassilev's  Assets

Sofia, March 31 (BTA) - The National Revenue Agency has imposed
a distraint on Bromak EOOD owned by banker Tsvetan Vassilev. The
entry in the commercial register shows that the Bromak assets
were seized as of Tuesday to the benefit of a criminal assets
forfeiture commission.

The distraint will make impossible the transfer or sale of any
of the assets Vassilev owns through Bromak and is obviously
aimed to preclude the sale by Vassilev to LIC33 of a package of
six companies: 43 per cent in Bulgarian Telecommunications
Company (BTC), 100 per cent in TV and radio broadcasting
services provider NURTS, and 91 per cent each in ammunition and
explosives maker Dunarit, military jet and helicopter repair
Avionams, the audience research company GARB and digital
terrestrial multiplex operator First Digital.

Claiming to be a group of European investors, LIC33 announced
last week that it had purchased the whole package for 1 euro in
return of promises to cover outstanding obligations worth about
900 million euro. They are suspected of acting as a front for
Vassilev as he tries to rescue his assets from possible seizure
by the Corpbank creditors. There have also been rumours for
Russian connections - which the company has vehemently denied.


It transpired on Tuesday that LIC33 have sought to meet with
Prime Minister Borissov. "Dnevnik" daily published a copy of a
letter LICss' Pierre Louvrier sent to the Prime Minister
requesting an official meeting and stating that his group "does
not ask any
favorable treatment, but simply respectfully ask for the
government to respect the rule of law, private property, the
freedom of entrepreneurship, and their personal security - what
they would expect in any EU country".

Prime Minister Borissov said he would decide what to do when he
receives the letter.

Extraordinary legislation

It transpired Tuesday that GERB are close to tabling legal
revisions prompted by the announced sale of businesses owned by
Tsvetan Vassilev to LIC33, and allowing the prosecutor general
or his deputy to put on hold a financial operation or a
transaction with assets in "extraordinary circumstances". The
head of the parliamentary legal committee, Danail Kirilov (GERB)
said these are changes in the Code of Criminal Procedure and
Code of Civil Procedure, and will likely be submitted to
Parliament before the end of the day. He would not specify what
would be "extraordinary circumstances" means.

The proposed legislation will enable the prosecuting authorities
to undo transactions retroactively.

Commenting the contemplated revisions, Prosecutor General Sotir
Tsatsarov warned that giving too broad of a framework for such
extraordinary legislation would be dangerous.

He also recalled the different positions on such extraordinary
legislation held by government members: the Prime Minister and
the Finance Minister are advocates of the idea while the Justice
Minister is against it.

A financial pyramid

In a separate development Tuesday, an ad hoc committee on the
Corpbank failure gave a hearing to representatives of the
central bank government and the conservators which were at the
Corpbank during the months of special supervision.

MP Yordan Tsonev said in his remarks that Corpbank provided
loans to letter-box companies which is why the creditors are
unable to get to the assets of BTC and other large companies
which have borrowed from Corpbank. Tsonev's take on the
situation was confirmed by the attending central bank officials
and the conservators.

Tsonev said that Corpbank was "an unusual business model, a
classical financial pyramid".

One of the conservators, Stanislav Lyutov, explained that the
companies which borrowed from Corpbank usually used other
credits to pay their interest - not revenue from own economic
activity. In some cases, loans were renegotiated 20 times

The former central bank vice governor in charge of banking
supervision, Roumen Simeonov, said that a financial pyramids has
never been exposed before its collapse. Asked whether the
banking supervision authorities did not have a way of
understanding that credits were being transferred from one
company to another, he said that what they monitor is regular
repayment which the actual cash flows are being monitored by the
auditors.

Central bank governor Ivan Iskrov blamed the KPMG auditors and
the commission for oversight on public auditors for the
apparent malpractice at Corpbank, and said that the commission
only reports to Parliament and it remains unclear to him why
they
certified faulty reports in the Corpbank case.

The present central bank vice governor in charge of banking
supervision, Nelly Kordovska, was confronted with questions
about her controversial withdrawal of a deposit of tens of
thousands of euro from Corpbank a day before it was put under
special supervision. She denied suggestions that she used
insider information and she said that she acted based on public
information, doing what many other Bulgarians did.

She denied having a conflict of interest.

She also said that the World Bank and the IMF are reviewing the
performance of the central bank and a report is expected
shortly.