site.btaAnti-Corruption Commission Investigates Development Bank Officials for Mismanagement and Embezzlement of 2019 Loan

Following numerous media enquiries about a BGN 148.5 million loan issued by the Bulgarian Development Bank (BDB) to Roadway Construction AD in 2019, the Commission for Anti-Corruption (CAC) gave some details in a press release on Friday.

The subject of the investigation is data on mismanagement and embezzlement committed by BDB officials in connection with a contract dated June 17, 2019, whereby the bank granted a loan of BGN 148.5 million to Roadway Construction, which was secured by a contract for the supply of inert materials by Patstroy Engineering AD. The principal shareholder in the latter company is Bio Mining AD. The investigation found that all three companies are managed by a Bulgarian citizen identified as R.G.

It was found that the contract which served as collateral for the BDB loan to Roadway Construction was terminated a week after it was signed in 2018. 

In the course of the investigation, the Commission for Anti-Corruption analysed numerous contracts between those companies in order to find out how the BDB loan was used. There is evidence that Bio Mining AD lent Kristalna Voda AD a substantial sum. It was found that the Bulgarian national R.G. is also linked to the management of Kristalna Voda AD.

The sale of Patstroy Engineering AD, which is connected to R.G., to a company registered in the southern town of Kardzhali in July 2024 is also subject to CAC's investigation.

The documents collected so far and their thorough examination have led to a reasonable assumption that there were breaches of the law which resulted in a significant detriment to BDB and the financial interest of the State.

The investigation by the Commission for Anti-Corruption aims to trace the overall process - from the disbursement of the loan by the bank to its absorption by the respective ultimate beneficiaries, in view of evidence that the collateral submitted to BDB for the loan was fictitious. BDB employees are under investigation for misconduct, CAC said in the press release.

Numerous investigative actions are to be carried out, including the collection of evidence. The Commission for Anti-Corruption will report the findings of the investigation to the competent prosecution office.

The Bureau for Investigative Reporting and Data (BIRD.bg) said in July that proceedings were initiated on an alert about crimes in the granting and use of a loan of BGN 150 million to a company related to Rumen "the Wolf" Gaytanski. The loan agreement was signed on June 17, 2019 between BDB and Roadway Construction AD. The Sofia City Prosecution Office terminated the proceedings in May 2023. The Bulgarian Development Bank missed the deadline to appeal against the termination of the criminal proceedings, BIRD.bg said.