site.bta Parliamentary Finance Committee Chair Blames Corpbank Conservators for Asset Stripping, They Deny Accusations

Parliamentary Finance Committee Chair Blames Corpbank Conservators for Asset Stripping, They Deny Accusations

Sofia, March 13 (BTA) - "The conservators that were appointed at
 the failed Corpbank are managing something that is not a bank,
and in the meantime Corpbank's assets have shrunk by 1 billion
leva," National Assembly Budget and Finance Committee Chair
Menda Stoyanova said on bTV Friday morning. Corpbank's
conservators later issued a statement denying her accusations of
 asset stripping.

Stoyanova recalled that an audit report set the amount of loans
extended by Corpbank with good collateral at some 1.8-2 billion
leva and said that these have since contracted by 1 billion.
"This means that, despite the legal restrictions, the Corpbank
conservators have allowed assignments and takeovers."

The MP commented that it was the obligation of the Bulgarian
National Bank (BNB) to find a way during the period of special
supervision to help the bank recover and preserve its assets.
"It failed in both, but the [Ad Hoc Parliamentary] Committee of
Inquiry is yet to prove this," she said. "The banking
supervision authorities have failed with Corpbank, and they may
be failing in other cases we know nothing about."

Stoyanova believes that the appointment of a trustee in
bankruptcy at Corpbank will stop the siphoning of the bank and
allow the creditors to litigate.

On June 20, 2014, having suspended all operations after a panic
run by depositors left it illiquid, Corpbank (Bulgaria's fourth
biggest lender) was placed by the BNB
under special supervision for a maximum of six months to allow a
 thorough audit and possible restructuring.

A decision of November 5, 2014 by which the BNB Governing
Council withdrew Corpbank's banking licence is being appealed by
 shareholders in the bank before the Supreme Administrative
Court (SAC). On January 13, 2015, a three-judge SAC panel left
the appeals without consideration and dismissed the proceeding.
This ruling was
appealed, too, before a five-judge SAC panel, and the case has
been pending before this last instance for more than a month
now.

After the Sofia City Court on Thursday dismissed a motion by the
 Bulgarian Deposit Insurance Fund to appoint a temporary trustee
 in bankruptcy for Corpbank, all parliamentary parties agreed on
 the adoption of revisions in the Bank Bankruptcy Act to make
that possible and stop the draining of the remaining Corpbank
assets.

Stoyanova said that BNB Governor Ivan Iskrov has a moral
obligation to step down over the handling of the Corpbank case.
"It was during his term in office that we saw
happening what everybody was saying would never happen in
Bulgaria."

The MP confirmed press reports that the acting BNB Deputy
Governor and Head of the Banking Supervision Department, Neli
Kordovska, withdrew an over 60,000 euro deposit she had with
Corpbank hours before the bank shut down. Stoyanova commented
that Kordovska may have done it lawfully, but she was obviously
able to rescue her money thanks to insider information. "Many
people at the central bank had inside information about the
goings-on at Tsvetan Vassilev's bank days before it was
placed under special supervision," she said.

Only three days before the appointment of conservators at
Corpbank, the central bank issued a statement saying that the
bank was liquid and functioning normally, and had high capital
adequacy.

Reacting to Stoyanova's statement, the Corpbank conservators
later in the day issued a statement saying that they work in
keeping with the law and within the powers vested in them. They
denied having disposed of any Corpbank assets, having considered
 any of the assignment applications filed with the bank after
November 6, 2014, when
Corpbank's licence was withdrawn, or any of the takeover
applications submitted to the bank after the legislative
restrictions took effect on November 11.

The conservators further explained that they were in no position
 to dispose of any Corpbank assets because all of them had been
garnished as part of the delicensing procedure and because the
law expressly bans it.

They said in conclusion that they were available for all kinds
of checks by the competent authorities and will offer their full
 cooperation.

In a related development, Prime Minister Boyko Borissov
explained to journalists that, under the law, conservators
monitor and authorize, whereas the trustee in bankruptcy is the
one who safeguards the assets. He thanked the parties which
backed the Government's idea to speed up the process of
appointing trustees in bankruptcy for Corpbank. In his words,
for months now, the appointment of trustees in bankruptcy has
been blocked by court procedures while "the plants are going one
 by one." Borissov recalled that assignments were banned after
Corpbank's failure but argued that this ban is not observed.
More than 800 million leva have already been rechannelled "on
the brink of the law", he pointed out. "What I heard from an
ambassador, who came to intercede on the subject, if Vivacom,
too, has somehow been bargained away, this will top 1.5 billion
leva. That's why this law must be urgently passed so that the
State could recover its money retroactively," the PM commented.