Bulgaria's Specialized Prosecutor's Office to Tackle Sugar Industry VAT Fraudsters

Crime | May 11, 2012, Friday // 10:42
Bulgaria: Bulgaria's Specialized Prosecutor's Office to Tackle Sugar Industry VAT Fraudsters Grisha Ganchev has adamantly denies accusations of participating in a VAT draining scheme in the sugar industry. Photo by BGNES

The Specialized Prosecutor's Office will decide Friday whether to press charges against the people arrested on suspicion of VAT fraud in the sugar industry.

The specialized prosecuting authority will have to decide whether to seek a change of the remand measure of the six.

A special operation conducted Thursday by the National Revenue Agency (NRA) and the Chief Directorate for Combating Organized Crime (GDBOP) resulted in six arrests, including the son of businessman Grisha Ganchev and two other managers of his company Litex Commerce.

The operation was aimed at busting an organized crime group in the sugar industry which had allegedly drained the state budget of millions of leva in VAT.

The six suspects were questioned until late on Thursday and the questionings and searches will continue Friday.

On Thursday morning, the headquarters of the Litex conglomerate of companies in Sofia was raided by anti-mafia police.

The officers seized documents and IT equipment.

In a media statement distributed Thursday afternoon, the Interior Ministry reported that the VAT fraudsters had also been planning to  to import a test quantity of 25 tonnes of sugar containing toxic elements from the region of Chernobyl in Ukraine, the home town of the busted nuclear power plant.

In the event that it could be sold successfully in Bulgaria, the group planned to set up permanent imports of toxic sugar.

If the sugar proved to be of poor quality it would be used for the production of natural juice.

In a Friday interview for the morning broadcast of private TV station bTV, Interior Minister Tsvetan Tsvetanov confirmed Thursday's findings, while Grisha Ganchev kept denying the accusations.

Ganchev is one of the biggest sugar importers in the country and owns four out of a total of six sugar refineries in Bulgaria.

The plants are located in Ruse, Sofia, Burgas and Dolna Mitropolia.

Ganchev is also the owner of the Litex FC and the Litex Commerce company.

In end-2011, Ganchev's joint venture with the Chinese company Great Wall Motors, Litex Motors, started the production of Chinese cars for the EU market in the Litex Motors factory near Bulgaria's Lovech, in the village of Bahovitsa.

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Tags: Grisha Ganchev, VAT fraud, sugar production, Interior Minister Tsvetan Tsvetanov, Chernobyl, Litex

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