The founder and former CEO of the Bulgarian Stock Exchange has harshly criticized the government for increasing its share to over 50%, saying it is effectively nationalizing the bourse at a knock-down price.

"This is an unprecedented event in our history – the nationalization of a structure that embodies the rules and spirit of capitalism at best," Victor Papazov said in an interview for Trud daily.

According to Papazov the bourse is apparently starting to lose its importance because "just a few people reacted to the news".

"The government's promises to list major companies on the stock exchange and bring the capital market back on track will not be kept, just as the same happened with the promise for a balanced budget and quick accession to the eurozone," Papazov added.

Papazov claims that the Bulgarian Stock Exchange does not remotely require central government control as it is a robust business with excellent IT systems from Deutsche B?rse.

Bulgaria's Finance Ministry raised earlier this month its share to 50%  plus one share from 44% in the country's stock exchange, which has been turned into a public company. The government bought 715,000 shares at BN 1 apiece.

A proposal to this effect was adopted at an Extraordinary General Meeting of the Bulgarian Stock Exchange on September 13.

It is expected that the listing of the Bulgarian exchange on its own platform will be a fact by the end of 2010.

Ivan Takev, the current executive director of the Bulgarian bourse, has explained that the government raised the state's stake in the Balkan country's stock exchange as it prepares to sell its majority to an industry investor and offer the rest to the public.

Bulgaria has discussed ways to sell its bourse stake over the past decade with Sweden's OMX AG and exchanges in Austria, Greece and Poland.