site.btaEconomy Minister Moves for Dismissal of Two Members of Three-member Supervisory Board of Bulgarian Development Bank

Sofia, May 27 (BTA) - Caretaker Economy Minister Kiril Petkov
Thursday proposed the dismissal of two members of the
three-member Supervisory Board of the Bulgarian Development Bank
 (BDB). The Minister said he was replacing the two, Mitko
Simeonov and Velina Bourska, after they refused to go to a
meeting he had scheduled with all three Board members to discuss
 hefty loans BDB has extended to several large companies.

BDB is supposed to lend to small and medium-sized businesses.

Shortly after he stepped in office as caretaker Economy
Minister, Kiril Petkov said that he was shocked to find that
eight companies had received a total of 946 million leva in
loans from the BDB. He said that was at odds with the BDB Act
and the Bank's Statutes.

According to a list released by the Economy Ministry last week,
the eight largest BDB beneficiaries include three companies
which have received over 140 million leva loans each: the Sunny
Day resort and the Blagoevgrad BT cigarette company, both of
which are reportedly linked to former MP-business owner Delyan
Peevski, and Roadway Construction which is linked by press
stories to Roumen "The Wolf" Gaytanski. Loans between 115
million and 140 million leva have been provided to Market
Investment (Technomarket) and International Investments (again
reportedly linked to Peevski). Loans between 60 million and 115
million leva have been provided to each of three companies:
Navigation Maritime Bulgare (owned by Kiril and Georgi
Domouschiev), Transpekt (owned by Peter Gospodinov and Georgi
Atanassov) and Insa Oil (Georgi Samouilov).

Simeonov and Bourska had informed Petkov in writing that they
were not going to meet with him and called the meeting "a
circus".

The meeting was live-streamed by the Economy Ministry, as Petkov
 had announced in advance.

The only one who went to meet with the Minister was Stamen
Yanev, the Supervisory Board Chairman. He has been with the BDB
since August 2020.

Addressing Yanev, Petkov said that "the fact that you agreed to
come here while your two colleagues did not, shows me where the
absence of transparency can be found".

The Minister asked Yanev how many of these loans were reviewed
by the supervisory board when he was on it. Yanev said none. The
 priority of the Board when he chaired it was to facilitate work
 of BDB with other commercial banks involved in providing aid to
 businesses during the pandemic.

Communication between the Managing and the Supervisory Board was
 difficult, Yanev said.

Petkov nominated former caretaker economy and energy minister in
 2014 Vassil Shtonov and financial expert Valentin Mihov to
replace the dismissed members of the BDB Supervisory Board.
Their appointment too is subject to approval by the central
bank.

The BDB Supervisory Board reshuffle, however, is subject to
approval by the central bank.

Petkov said that an amendment has been proposed to the BDB
Statutes which caps at 5 million leva the size of loans the Bank
 can extend.

Petkov has also asked to meet Friday representatives of the
eight biggest DBD borrowers but only one, Navigation Maritime
Bulgare, has reportedly responded to the invitation. NV/ZH, LN