Bulgaria Notorious Energy Tycoon Trial Begins with False Start

In a surprising move the Sofia City Court postponed Thursday the case against energy tycoon Hristo Kovachki.

The Judge, Alexandra Iordanova, based her decision on the fact that the two legal advisors of the National Revenue Agency (NRA) failed to present a valid power of attorney. The NRA has filed a civil suit against Kovachki for compensation in the amount of BGN 16,7 M.

Kovachki's attorney, Ina Lulcheva, reacted strongly to the decision since a penalty case cannot be postponed over violations related to a civil suit, according to Bulgaria's Penalty Code. Lulcheva declined, however, to comment if the decision is triggered by political pressure and said the defense council would not request the Judge's removal from the case despite their utter disagreement with her rule.

The problem arose after the Court established that the NRA legal advisor did not have the right to appear at penalty trials and his power of attorney has expired because it was signed by the former Finance Minister Plamen Oresharski.

The case will resume on November 24 when NRA must present valid power of attorneys signed by Finance Minister Simeon Djankov.

Kovachki's defense team further say they might request for the case to be returned to the Prosecutor over significant discrepancies between the preliminary proceedings and the official charges and that the trial is held under the speedy procedure.

12 of the total of 22 witnesses appeared before the Court Thursday. Kovachki, himself, arrived 20 minutes late and entered the Court through the back entrance to avoid representatives of the media.

The energy tycoon is officially charged with tax evasion amounting to BGN 16,7 M for the 2005-2008 period from four of his businesses.

Unnamed sources from the energy sector claim the charges involve import of used equipment for the heating utilities in the cities of Burgas and Pleven that had been transferred trough several businesses in order to avoid the Value Added Tax (VAT)

Kovachki, whose party failed to win seats in July's parliamentary election, has diverse business interests, ranging from manufacturing to banking and from energy to retail.

He owns the Thermal Plants "Maritsa-Iztok 3" in Dimitrovgrad and "Bobov Dol", several mines, as well as the heating utilities in Vratsa, Burgas, Veliko Tarnovo and Pleven, the grocery chain "Evropa" and the "Atomenergoremont" company.

Believed to be one of the richest men in the Balkans, Kovachki has denied any wrongdoing.