Prosecutor’s Office to Investigate Judges of Cases Against Witnesses in the Corporate Commercial Bank (KTB) Bankruptcy Trial
The head of the Special Prosecutor’s Office Ivan Geshev
The long anticipated trial for the embezzlement of nearly 3 billion leva from the bankrupted in 2014 KTB begun Wednesday with a formal reading of the 5000-page operative indictment. The whole indictment is said to be between 11’000 and 12’000 pages long; its resume, which was published by the prosecutor's office in July 2017 is 155 pages long.
This reading at the start of the trial is a very formal part of it and one that is very often skipped in reality. Usually both sides agree at the beginning of the trial that reading the indictment or the operative part out laud is not necessary and the reading is only indicated in the record.
Judge Verginia Petrova from the Special Penal Court insisted on the reading, however, which the head of the Special Prosecutor’s Office Ivan Geshev described as deliberate postponement of the process.
After some debate and objections, including to having everyone stand during the reading (which was sustained), the reading of the 5000-pages began. The whole reading is likely to take days; the first 20 pages took 2 hours to read. Ivan Geshev said that the prosecutors will gladly read the whole operative indictment although, he underlined, if this part was skipped witnesses’ questioning could’ve started “tomorrow”. The special prosecutor’s office’s representative said Thursday (when the reading of the operative indictment continued) that apparently the goal of the defense is to turn the trial into a political one “so Tsvetan Vassilev wouldn’t be extradited from Serbia.”
Meanwhile Ivan Gehsev announced that one of Tsvetan Vassilev’s attorneys had been accused of witness tampering, including murder threats and vandalism. Tsvetan Vassilev is the main defendant in the trial along with 17 others. Vassilev is the former majority shareholder and chairman of KTB’s supervisory board. Vassilev has been in exile Serbia since 2014 and was not present at the session. The Serbian court’s decision on Vassilev’s extradition is still pending.
Another parallel development is an accusation by another witness of the prosecution that witnesses of the defendant’s had recently been opening numerous cases in court against him. The prosecutor’s office will look into the cases and also investigate whether magistrates have broken the law.
“Apparently the pressure will continue, Ivan Geshev concluded.”
Meanwhile it was announced that the Sofia City Prosecutor’s Office has accused two KTB questors, Stanislav Lyutov and Elena Kostadinchev for large scale deliberate irresponsibility.
The alleged crimes have resulted in 1’070’383,83 leva losses. If proven guilty, the defendants could receive a sentence between 3 and 12 years in prison.
The claim comes three years after an investigation of the two was initiated.
Financial Supervision Commission to Launch Inquiry into Peevski’s Cigarette Companies
The Financial Supervision Commission has begun an inquiry into DPS MP Delyan Peevski’s cigarette companies, Capital Weekly reported. According to the reporting the companies in question are Bulgartabac Holding, Yuriy Gagarin and Blagoevgrad BT.
The Commission is investigating the change of the majority shareholder of cigarette packaging company Yuriy Gagarin – Plovdiv, which occurred without the knowledge of the rest of the shareholders and a property sale, also done without shareholders’ knowledge.
The property that was sold was a warehouse close to Sofia, which was bought in 2016 for 17 million leva. Since the amount exceeds 2% of the total assets of the company, the sale could be made only with a sanction by the shareholders.
Instead the board of directors makes a decision to sell the warehouse to Tchnomarket. At the time, the majority shareholder in both Technomarket and Yuriy Gagarin is Blagoevgrad BT.
The possible fine for this violation is between 20’000 and 50’000 leva.
The other violation - failing to inform shareholders about the change of ownership of Yuriy Gagarin by selling the majority share of 66% to the company Quatra LLC., registered in the UAE – is also investigated but possible sanctions are still unclear. The Commission is still waiting on additional documentation on the deal.
Largest Ruling Party GERB also Doubts Credibility of World Press Freedom Index
GERB MP Toma Bikov
After several DPS MPs and numerous editions, owned by DPS MP Delyan Peevski commented that the World Press Freedom Index (WPFI) and the organization that measures it, Reporters Without Boarders (RSF) are not credible, GERB MP and former journalist Toma Bikov also expressed a similar opinion.
Bulgaria ranked 111 in the most recent report by RSF, far behind EU member states and also behind Western Balkan states. The report pointed to DPS MP Delyan Peevsky and his media empire as the main reason for the continuous drop of the country in the ranking.
Toma Bikov said that the ranking must be critically read and that it wasn’t fair for Bulgaria to be ranked 111 just because “an MP owns seven newspapers”.
Answering a question of the opposition whether the Electronic Media Council (SEM) should comment or react in some way to the Index, Toma Bikov said that the opposition has too high of expectations for SEM and questioned why SEM would have to say anything about a “ranking, conducted by an NGO, that I personally do not trust.”. He went on to question the methodology of the Index and concluded that it is rigged.
Five Arrested in Plovdiv for Embezzlement of Health Fund
Five people were arrested during an operation led by the regional prosecutor’s office in Plovdiv for embezzling 1 million leva from the Health Fund. Two of the accused are employees of the Fund, the other three are accomplices. The scheme used real hepatitis patients, prescriptions and phantom pharmacies through which the embezzlement was finalized. The patents got their medication in real pharmacies but the schemers managed to fill the prescriptions for a second time through their phantom pharmacies without being detected.
60% of the income went to three employees of the Health Fund, who were collectively in charge of pharmacy control and misconduct.
The schemers registered a new company every three months in order to avoid being detected. The companies were registered under the name of a socially disadvantaged person, who is also arrested.
Investigative Journalist Beaten in front of his Home
The investigative journalist Hristo Geshov from Cherven Bryag, who has produced continuous reporting on local government misconduct and corruption through company rings, was beaten in front of his home in Cherven Bryag Thursday night. The incident was reported by Geshov himself on his Facebook profile.
Geshov has filed a complaint at the prosecutor’s office and the police.
Local law enforcement has confirmed the incident but refused to give out any information. Mediapool.bg tried to contact the speaker for the local directorate of the Ministry of Interior in Pleven Mariana Tsvetkova but had no success. There is no mention of the incident in the Ministry of Interior information bulletin.
Hristo Geshov’s most recent reporting revealed how public procurement for European funds for food for the poor is always awarded to two firms: one is directly linked to Cherven Bryag’s mayor Danail Valov, and the other – to the municipal counselor and the mayor’s fellow party member Yavor Bakardzhiev.
Lovetch Deputy Mayor Brutally Beaten
Deputy mayor Tsvetan Georgiev
Lovetch deputy mayor Tsvetan Georgiev was brutally beaten in front of his home Thursday. Georgiev has two broken legs, head wounds and other trauma. According to doctors the fractures to his legs are severe and it is lucky that he won’t remain handicapped. According to unconfirmed reports Georgiev was beaten with an axe.
Lovetch mayor Korneliya Marinova condemned the attack in very strong words and continued to say that “if anyone thinks they would scare this team with such acts, they are mistaken”. In her words, Georgiev is an exemplary public servant, who has alerted the prosecutor’s office many times for illegal logging taking place in nearby villages.
It’s likely that these alerts are the reason for the beating. Marinova also said that her deputy was repeatedly threatened verbally directly, and indirectly. She described the attack as an attempted homicide.
Parliamentary Inquiry into the CEZ Deal Concludes with No Results
The parliamentary committee appointed to investigate the deal with the energy assets of CEZ has concluded its inquiry without finding any irregularity. The committee had to look into the company that will buy CEZ and particularly where the money for one of three Bulgarian power distribution companies would come from. Ginka Varbakova’s firm Inercom, based in the town of Pazardzhik is relatively tiny compared to CEZ. The CEZ deal itself is worth 340 million euro, while the company Inercom has an estimated net worth of 25 million euro.
However, the inquiry has concluded with no real financial assessment of Inercom or the planed payment for CEZ, as financial institutions have refused to give out information as to their intent on financing the deal. This has made it impossible to move forward with the investigation as the information is vital to the assessment. The financial institutions have based their refusal to disclose information on professional secrecy, which angered the initiators of the committee from the opposition and BSP MP Zhelyo Boychev in particular, who threatened to submit a bill to regulate the term professional secret.
“Without knowing who and how will finance the CEZ deal we cannot know who is the real buyer” Boychev said.
The report produced by the committee states that the CEZ deal does not correspond and does not fulfill the requirements of the Strategy for the Privatization of Power Distribution Companies from 2003, while Inercom does not meet any of the criteria for candidate investors in the energy network.
The committee has called for the Council of Ministers to assess whether the deal meets the Strategy’s requirements.
Energy Sellers Regard the Energy Reform as Discriminatory
Energy sellers regard the amendments to the Energy Law, which legislate the liberalization of the energy market as discriminatory. The amendments were passed through Parliament in April and will come into force July 1.
Sellers have requested that President Roumen Radev veto the amendments on the grounds that they do not correspond to European law and infract competition. However, it seems the President has followed the Employers’ Association’s request from last week that he ratify the amendments as quickly as possible and he has done so.
From July 1 all energy producers will sell energy on the free market, including all renewables. They, however, will continue to sell at preferential prices as they do now. The difference between the selling price and the price defined by the regulator, which will be higher, will be covered by the Energy System Security Fund.
The regulation concerning the preferential pricing of renewables is what the Association for Free Energy Market (ASEP) is against. In their view such an approach in not in favor of a competitive business climate.
Moreover, according to ASEP this part of the law needs approval by the European Commission. MPs, however, disagree and has passed the document without notifying the Commission.
“[Passing the law without notifying the EC] means ignoring the Treaty on the Functioning of the EU. [..]. This could lead to opening a court procedure in European Court of Justice, which could lead to fines for Bulgaria.”, ASEP warned. The amendments, however, are already a reality.
Another concern of ASEP’s is the so-called Social Responsibility Fee. The law requires for sellers to secure bank guarantees for the fee, while they are not the only player on the market, who is obliged to pay it.
ASEP aserts that overall the Energy Law is outdated and inefficient. The law was adopted the first time in 2003, long before Bulgaria’s accession to the EU or the consensus that the way forward is a liberalized energy market. It’s no wonder, ASEP suggest, that the law has been amended nearly 40 times since it was first adopted. In their view, the country Energy Law needs to draft a new law that would accommodate the current energy market realities.
Future Gas Hub Near Varna Becomes Project of National Importance
The future gas hub near Varna, whose feasibility studies are not yet complete, has been declared a project of national importance along with eight other projects of the Bulgarian national gas operator Bulgartransgas, work on which is yet to begin.
Representatives of the Council of Ministers have stated that gas infrastructure, connecting the regional markets with those of Central and Western Europe will be constructed for the realization of the gas hub project.
Democratic Bulgaria (DB) Calls for Referendum on Waste Incineration
The concept for the future incineration plant
DB has begun campaigning against production of heat from waste incineration. The capital municipality made a decision to invest in an incineration plant, for which it has already started the procedure for drawing a loan of 67 million euro from the European Investment Bank.
DB has called for a local referendum on the project and has started collecting signatures for in 8 May. Meanwhile another organization, For the Earth, took to the city to gather opinions of citizens about the project on 9 May. The results of the improvised poll will be submitted to the municipality.
According to DB the plant will be hazardous to the health of the population and also financially unjustified. DB argues that a referendum is needed as the project carries weight in several important areas, as public health, economy and energy policy. Moreover, a referendum would entail real debate and a better information campaign for the public, while at this point neither the public has undergone a real debate on the matter, neither is it well informed on the risks and implications.
DB maintains that the project for the plant is based on outdated technology and methods, which further makes the project questionable. Such a plant, they argue, will further increase the concentration of fine dust particles in the city, which already struggles greatly with heavily polluted air especially in the winter.
Sofia municipality has rejected claims that the plant will lead to increased concentration of fine dust particles. According to the environmental impact report the dust particles by the Sofia TPP will go up but at the same time the amount of dust particles from Sofia Heating will drop as certain installations will be shut down.
Foreign Minister Ekaterina Zaharieva: Bulgaria will Close EU-Bulgarian Income Gap in 10 Years
If Bulgarians’ income continues to rise with the same rate as last year, In ten years’ time the gap between Bulgarian and European average income will close, foreign minister Ekaterina Zaharieva predicted during a forum dedicated to the income in Western Balkan states.
She reminded that the income growth over the last year was over 11.5%, which is much higher than the European. If the trend continues Bulgarian average income in ten years will match the European one.
Most recent data by workers’ unions suggest that the average salary in Bulgaria is 5 to 10 times lower than that of the old member-states and about 1.8-2.2 compared to the newer members.
Poll: For 1/3 of Bulgarians Communism and Totalitarianism is Acceptable
"We want our socialism back"
1/3 of Bulgarians feel that some parts of bolshevism, Stalinism, and communism are acceptable, according to a recent poll by Gallup International. Still, the majority of respondents – 44% - are entirely against any form of such regimes. 6% support them entirely.
The poll also reveals that elements of the communist ideology are more common than Nazi elements. 77% are entirely against Nazi ideology, and 3% support it, and 12% say that some elements of the ideology that are acceptable, some aren’t.
The conclusion of the poll is that over the last year and a half the trust in the generalized European image has regained some of its lagging, registered 2016. In the early months of 2018 over 60% of Bulgarians trust the EU, while distrust is around 30%.
Bulgaria Third in Open Company Data Index
Bulgaria is among the leaders in open company data, Open Company Data Index reveals. The index is based on the largest open data set in the world, OpenCorporates.
Bulgaria is third behind Denmark and the United Kingdom. The high rank is due to the recent massive integration of data from the Trade Registry to OpenCorporates, which was achieved with the help of software company Ontotext.
The OpenCorporates database now includes 970’000 Bulgarian companies.
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