site.btaSix of Eight Big Borrowers of Bulgarian Development Bank Say in Writing They Duly Service Loans

Sofia, May 28 (BTA) - A meeting called by caretaker Economy
Minister Kiril Petkov with eight companies which received large
loans from the Bulgarian Development Bank (BDB) could not take
place as scheduled on Friday, after no representatives of the
companies turned up, Petkov told reporters. However, six of the
borrowers replied in writing, stating that they duly service
their loans, with no payments in arrears. The two companies that
 did not send replies are Blagoevgrad BT and Transpekt.

Shortly after he stepped in office as caretaker Economy Minister
 in early May, Petkov said he was shocked to find that eight
companies had received a total of 946 million leva in loans from
 the BDB. He argued that was at odds with the BDB Act and the
Bank's Statutes. The BDB is supposed to lend to small and
medium-sized businesses.

Meanwhile, the Economy Ministry, which exercises the State's
ownership rights for the BDB, made changes in the Bank's Audit
Committee and moved for the dismissal of two members of the
Bank's Supervisory Board. Also, BDB's Statues were amended,
capping loans at five million leva.

Asked if he will contact the two companies that did not provide
information about their loans, Petkov said that his task was to
make sure that the taxpayers' money is used "for the right
purpose and in the most efficient manner, and that there are no
problems with the loans". He also said that his task was "to
make the BDB work", adding that financing should be available to
 export-oriented businesses.

Regarding the only one of the eight borrowers that had confirmed
 participation in Friday's meeting, Navigation Maritime Bulgare,
 Petkov said they sent an exhaustive letter informing in great
detail how the borrowed money had been spent. The loan was taken
 out to focus on the company's export activity.

Petkov said hearing that the loans are being serviced "makes him
 happy". He went on to say that the way the loans were issued
and the fact that the borrowers were big companies continued to
draw criticism. The Minister argued that the Bank should have
lent to SMEs instead, as stipulated by the BDB Act.

Petkov said that many alerts had been received by the Economy
Ministry from SMEs which did not have access to BDB loans. He
said the Ministry is open to dialogue on each rejected loan
application that "was expedient and designed for SMEs".

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 and 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). RI/ZH