site.btaFinance Minister Porozhanov: Corpbank's Audit to Be Completed in Early October

Finance Minister Porozhanov: Corpbank's Audit to Be Completed in Early October


Sofia, September 29 (BTA) - The audit of the Corporate
Commercial Bank (Corpbank) is supposed to be completed in early
October, Bulgarian Finance Minister Roumen Porozhanov said on
Nova Television Monday morning. "A Vienna-based fund is
interested in preparing a rehabilitation plan for the bank on
the basis of this audit. To me, this is the best option," the
Minister added.

The prospective investors are expected to conclude an agreement
on confidentiality of information and to start receiving
information from Corpaank's conservators.

The Minister explained that the special supervision regime does
not allow depositors access to their assets.

Regarding the infringement procedure that the European
Commission opened against Bulgaria last Thursday for its failure
to correctly transpose the Deposit Guarantee Scheme Directive,
Porozhanov said that the Commission is communicating with the
Government and the central bank to find out how far the
Directive has been transposed correctly, so that the depositors
could receive their money as soon as possible, after the bank's
liquidity problems are identified.

Corpbank suspended all operations on June 20 after a run by
depositors left it illiquid, and on the same day the Bulgarian
National Bank placed it under special supervision for a maximum
of six months to allow a thorough audit and possible
restructuring.

"Our law provides for a special case of making the assets
available: after the bank is adjudicated bankrupt and its
licence is withdrawn. This was decided five years ago. The law
was then sent to the European Commission, and it did not find
any problem with it. Judging from practice, however, a special
supervision regime may last rather long: for three months, with
an option for an extension by another three," the Finance
Minister explained. In his words, this comes into conflict with
the Directive, according to which depositors must have access to
their money within 20 days.

"We are drafting a law aligning Bulgarian legislation with the
Directive," Porozhanov said. "When it is enacted, the Bulgarian
Deposit Insurance Fund will start paying depositors within 20
days."

"Still, I would like to see a rehabilitation plan," he
commented. "The European Commission would not allow limitations
on withdrawals if the bank is rehabilitated. The plan will
definitely have to be approved by the Commission."

The Finance Minister said that the Bulgarian Deposit Insurance
Fund has at its disposal less financial resources than are
necessary. The deficit will be made up by a
Government-guaranteed debt issue.