'Vivacom Is Tasty Bite For Political Hyenas', Tsvetan Vasilev Tells Banker Weekly
Bulgaria's Banker weekly has published an interview with Tsvetan Vasilev, majority owner of KTB AD, headlined "Vivacom is a tasty bite for political hyenas".
Q: Mr. Vasilev, are you surprised by the recapitulation of the case of Corporate Commercial Bank (KTB, Corpbank) presented by Prime Minister Boyko Borisov in Berlin? Without beating about the bush, he said that the bank had been deliberately forced into bankruptcy and cited former Prime Minister Plamen Oresharski and former Finance Minister Petar Chobanov as the culprits. Did you know that parties injured by the bankruptcy started basing the claims they file in court on this recognition?
A: As I stated publicly some time ago, KTB AD was deliberately driven into a state of bankruptcy with the unanimous agreement of all leading political forces in Bulgaria (or at best with the dubious indifference of some of them). The entire state apparatus was mobilized for the implementation of this disgraceful plan, including the investigative service and the prosecution authority, the police, the security service, the Bulgarian National Bank (BNB), the National Revenue Agency (NRA), and the government. The goal of this operation, a throwback to the 1940s, was to get rid of me, at the same time pillaging what I had created.
Ironically enough, an MP from the Movement for Rights and Freedoms (DPS) party, rumored to be a perfidious villain, was entrusted with the task of overseeing the crackdown on me. Ancient philosopher Seneca has said that the things which goaded man into destroying man were envy, hatred, and fear. I believe that all of the above were at play in the case of KTB AD. By the way, it is worth noting that next to no representative of the bankers’ guild braved a comment on the scandalous attack against KTB AD, as if it were normal for any bank to be attacked in this way. Now some bankers from competitive institutions have the nerve to spread slander suggesting that KTB AD was distorting the market through high interest rates.
I claim just the opposite, namely that most banks on Bulgarian territory are distorting the market through low deposit interest rates because they shift the burden of their inefficiency and bloated headcount onto their clients and depositors. The Bulgarian state is financed at interest rates of over 5%, so it is normal for banks functioning on the Bulgarian market to be financed at a similar rate. I have been asked many times to disclose KTB’s formula for success and I have explained on several occasions that we have managed to service a larger number of customers with a smaller headcount because we have considered the optimization of the internal banking operations and the issue of employee efficiency and qualifications as top priorities.
To sum it up, the names of the puppeteers, of those who were directly involved in the deliberate destruction of KTB, as well as of their accomplices, will become clear during the numerous cases filed against he Bulgarian state. Unfortunately, the Bulgarian society has not yet become aware of the stupendous manipulation it witnessed. After saying ‘’A’’,Prime Minister Borisov should say “B”, I believe.
Q: Reports and mutual accusations of plundering assets of KTB AD and related companies have been circulating for months. The latest “hit” has been a scheme involving the transfer of expensive property through resale or contractual mortgage without any actual payments taking place. There has been a lot of talk about the Evrobild 2003 EOOD company, controlled by your trustee Biser Lazov, who is currently a protected witness for the prosecuting authority. Are you aware of the scope of these practices?
The assault on KTB AD was organized exactly for the purpose of treacherously pillaging its attractive assets. Now there is no doubt that the attack was organized with the indispensable assistance of insiders. To show their gratitude, the organizers of the crackdown on KTB AD are now rewarding them with “carrots”, while the prosecuting authority is turning a blind eye, because key officials are involved in the attack against the bank. I hope that the European Commission at least will not turn a blind eye on this in its next monitoring report on Bulgaria.
Q: Obviously the most high-stakes intrigue revolves around Vivacom, which is understandable, taking into account the huge assets and revenues of the company. However, how is it possible a key company like Vivacom to be taken over against the will of its shareholders?
A: Vivacom has always been a company attracting overriding interest not only from the savage financial benefactor of DPS, who lacks proven income, and his allies, but also a number of other political hyenas in the Bulgarian jungle. As I have publicly declared on previous occasions, the appetite for the Vivacom-NURTS package is another major reason for the attack against KTB AD.
After it turned out that I could not be blackmailed into transferring Vivacom to those circles and the prosecuting authority turned a blind eye to my tip-off against the racketeers, an exquisitely plotted scenario against the bank was set in motion, and it was implemented professionally. Seeking to acquire the coveted assets for a low price, the script-writers applied a wide range of methods and means inspired by Hollywood blockbusters, which had they probably watched during their office hours. By sheer “coincidence”, a director of TC - IME AD [Technology Center - Institute of Microelectronics AD], a shareholder of Vivacom, is a protected witness for the prosecuting authority.
Actually, to grasp the actual depth of the plot, one has to go back in time to the scandalous launch of bankruptcy proceedings against TC - IME AD by TES (a company controlled indirectly by the financial benefactor of DPS, whose debt to KTB AD were coincidentally ceded to First Investment Bank AD) without any debt being owed to it.
As you probably remember, the French Ambassador to Bulgaria publicly exposed the scheme in question, which had been repeatedly applied by the same members of our judiciary in relation to companies which they liked.
At the same time, a special purpose vehicle of VTB Capital is a nominal shareholder of Vivacom. Unfortunately, this caused the Sofia-based unit of this investment bank to resort to unwholesome activities and to engage in tacit cooperation with my “well-wishers” against the interest of Vivacom and those whom it represented. The remaining part of the scenario drafted for Vivacom, in case the company failed to end up in the hands of those intended, involved unprecedented pressure and threats, including warnings that the company would be liquidated through the leverage of the state apparatus, including national regulatory bodies, the National Revenue Agency (NRA), and the prosecution authority.
There is an infinite number of “creative” methods for exerting financial pressure over the respective institutions. To illustrate my point, a Vivacom stall at a Sofia-based shopping mall was recently imposed a hefty fine due to the lack of a toilet facility. Fines of that kind have been snowballing and there is a pattern to that. Somehow I doubt that the same standard is applied to other companies. I would like to emphasize that in order to thwart the hellish plans of the script-writers and to preserve the value of Vivacom, talks are underway now for the acquisition of shares of the company by a big and renowned US company. I would like the maximum possible value of the company to cover a substantial portion of the liabilities of KTB AD.
Q: You’ve said that a lawyer close to DPS and GERB urged some of Vivacom’s directors to vote in a certain way and the supervisory board voted for the dismissal of the chairman of the management board against the shareholders’ will. Do you have Mr. Zlatozar Surlekov in mind and, if you do, do you have reliable information at your disposal?
A: The lawyer in question has been providing legal advice relating to the private interests of the financial benefactor of DPS as well other well-known politicians for the past 10 years or so. I’ve found out recently he claimed that he represented the interests of the state; I believe the source of this self-confidence lies in the close relationship between a member of the current government and the DPS treasurer.
The attempt to stage a putsch at the supervisory and governing boards of Vivacom from within is scandalous, to say the least. The ideologues behind it are the above-mentioned lawyer, who had provided strategic advice to the newly hatched “banker” often residing at Berlin Hotel as well as the gold-seekers from the Sofia branch of VTB Capital, who had misled their head office.
An interesting detail is that by using various “creative” methods - from door-stepping of supervisory board members through suggestions whom they should serve to save themselves (not clear from what) to systematic threats including threats of violence –emissaries of the ideologues persuaded supervisory board members to vote against the will of the shareholders they represent. As you know, each of the shareholders in Vivacom has its quota in the supervisory board which should protect its interests, not the interests of other people or political parties.
Another interesting detail is the personality earmarked by the ideologues to replace Mr. Surlekov – a member of the company’s former management team about whom the company shareholders had serious doubts he was able and competent to tackle the new development strategy.
Q: The day-to-day management process at Vivacom shouldn’t be that important but considering the multitude of offshore companies behind the telecom, various interests seem to be intertwined in it. Do you think this is correct, having in mind that the documents are being signed by the acting managers who might be tempted by something or someone?
A: Those involved in day-to-day management have a leading role to play in the distribution of the company’s cash flow. The purse of the financial benefactor of DPS has obviously been emptied somewhat after Bulgartabac was eaten up and the cash tap at Vodstroy was turned off and now it’s time to look for new assets to plunder such as Petrol and Vivacom. Rumours have it that those preying on Vivacom want to gradually install their people in key positions, who will then purely accidentally direct funds towards companies designated by the organizers of the putsch.
Q: As far as it is known, at the end of January a general shareholders meeting will be held to elect a new supervisory board. Is it likely in the meantime for a change to occur in the chain of owners of Vivacom that could thwart that meeting. Have any attempts been made to do that?
A: A new meeting of the supervisory board has been scheduled for end-January, at which the three of its members who had proposed the change in the management board should state their motives. I suppose that the pressure exerted by the “defenders” of public interest to enter the change in the Commercial Register will continue until then. I also hope that meanwhile all institutions will be prudent enough to prevent jeopardizing the existence of one of the biggest companies in the country.
Q: What will happen to the credits taken out to finance the purchase of Vivacom in case of a forced change in ownership and in case of keeping the current ownership structure?
A: The acquisition of Vivacom – including the participation of VTB Capital – was financed by KTB AD. It was part of the long-term strategy for the bank’s development through acquiring undervalued assets, restructuring them and selling them to strategic investors. The value of Vivacom has nearly trebled compared with the purchase price since the acquisition in 2012. We shouldn’t forget that the company’s former management had led it to near-collapse and it was not by chance that we decided to keep as managers the staff we considered to be the most skilled in professional terms.
A serious reform has been conducted at the company since 2011, a development programme was adopted, new modern practices have been introduced as well as products that have attracted many new clients.
Before the attack on KTB AD was launched, the value of the Vivacom-NURTS package wasn’t lower than EUR 650M. If we add Petrol, the value will reach EUR 1B. It’s hardly a coincidence that the liquidators of KTB AD have a violent appetite for these companies. On the other side, I don’t believe that the three consultancies had taken into account the value of those assets in the bombastic and extremely unfounded conclusions in their contract reports in October.
Q: You’ve asked recently why the Prosecutors’ Office has shown no interest in finding out who the real owner of 80% of Bulgartabac’s capital is. Do you have an answer to this question now? Looking from the outside, it seems that silence is being kept about some developments in the business world, while a strong emphasis is laid on others, even using half-truth or lies.
A: It was a rhetorical question as almost everyone knows who the real owner of 80% of Bulgartabac’s capital is. I expected neither an answer, nor interest from the Prosecutors’ Office because that’s the way they feel most comfortable. The problem for those people will arise from the nearly unavoidable bankruptcy of the company which will be the logical result of the way it is being run at the moment. We also see the administrators authorized to manage KTB AD doing their best to avoid standing in the way of the self-proclaimed majority owners of Bulgartabac, who are working against the company’s interests and its minority shareholder KTB AD.
Q: You accused the authorities of failing to act against debt cession and offsetting practices at KTB. An amendment to the Bank Insolvency Law was adopted declaring them null and void retroactively, from the date on which the central bank seized control of KTB. But meanwhile people claim that ceding of debt is ongoing. What information do you have and what is your comment?
A: The debt ceding arrangements have always been a point of controversy for two reasons at least. One lies in the priority of certain categories of creditors over others, the second one stems from the impossibility to make a proper valuation of an asset and the likelihood of purchasing it below its value. In the case of KTB this is even more relevant considering the specifics of lending for acquiring some of the bigger assets. In this regard, I could have a concrete opinion only if I have information about the concrete debt ceding arrangements. However, I think that the prices in these arrangements should be used as a benchmark in the valuation of assets in case those arrangements are cancelled. For example, if a credit exposure of 10 million is 100% repaid through a ceding arrangement, which has subsequently been cancelled, this exposure should be offered for sale at 100% of its value, and not for a price based on the imaginary provisions calculated in the made-up and frivolous reports by the three auditing companies.
Q: After admitting recently that the moment for the recovery of KTB has been missed, do you believe now it’s possible for the court to revoke the BNB’s decision to cancel KTB’s banking license”? Are you afraid the bank’s shareholders will be left out of the litigation process - like the depositors and the executive directiors were – based on the inconsistent motive of lack of legal interest?
A: An intolerable pressure has been exercised over the court in an attempt to enable the Prosecutors’ Office and the BNB to prove their false cases. Considering this, everything is possible. The BNB’s attempt to exclude the shareholders from the litigation by asserting they had no legal interest in the case represents a stark violation of basic legal and economic principles. On the other side, it illustrates the unrefined, sick imagination of the “Berlin-Aviora” creative laboratory. I’m firmly convinced that such trampling upon the rights of shareholders cannot but be mentioned in the European Commission’s report on Bulgaria. Should the Bulgarian court break the law, I and the international shareholders in KTB AD are ready to refer the case to the European Court in Luxembourg.
Q: If KTB is ruled insolvent, will there be enough assets to repay creditors?
A: Definitely not, if the assets are to be sold according to the plotted scheme. This is the philosophy of the methodology the BNB has deliberately opted for: to undervalue KTB AD’s strategic assets with the aim of not only avoiding repayment of debt to creditors but also of selling those assets dirt cheap to individuals and firms designated by the puppeteers of the attack against KTB AD.
The answer is ‘’yes” if the interest of the depositors and shareholders in KTB were to be safeguarded to the maximum. This approach, however, is requiring an objective evaluation of assets – something that the BNB and those who are pulling its strings don’t like.
Q: What do you think of the court scandals surrounding the allocation of judges in insolvency lawsuits - against KTB as well as against companies such as TC-IME?
A: I think they are metasthases of the massive tumour that has grown across Bulgaria’s judicial system, particularly over the recent years. It’s strange that attention to this issue was paid only after the French ambassador spoke about it - in connection with a French firm. When Bulgarian companies are being subject to such outrage and mockery, all politicians elected to protect public interest, turn a blind eye as if this doesn’t concern them.
The personalities exposed by the French ambassador are the same who organized the illegal takeover of TC - IME and TV7 and launched insolvency proceedings against them. It’s hugely regrettable these practices have been typical for Bulgaria for years and have been orchestrated from one and the same place. Not only no authority has addressed the issue; the victims have to fight corruption pervading the entire judicial system on their own.
Q: Are you following the developments in the criminal lawsuit against you? What is the Prosecutors’ Office doing alongside giving interviews and are there serious motives behind its request for your extradition?
A: It’s obvious that from the very beginning the Prosecutors’ Office has built its biased attack against me on a Bulgarian model of Hollywood movie style. There were accusations against innocent citizens aired on television, there were threats, there were excuses a mistake had been made, there were lengthy interviews by investigating prosecutors in specially selected media outlets, even though it is highly questionable such interviews are ethically permissible, particularly having in mind that the investigation hasn’t been completed. One can also suspect that not all words in those interviews are their own. I assert that the investigative authorities and the prosecutors’ office were used to defend private interests and the public will realize whose interests they were sooner or later.
As the procedure for my extradition is ongoing, I would comment on the concrete arguments in the request for my extradition and their quality only in a court of law.
Q: Do you have information what has been happening at KTB after its license was withdrawn? What has been happening at Victoria Bank after the sale of most credits from its loan portfolio? Will you comment on the events at the two banks?
A: I have information that outrageous acts had been committed by the administrators, respectively the BNB, at both institutions. My colleagues from KTB AD informed me that they had been issued oral instructions in violation of the internal regulations of the bank in order to to leave no trace as to their origin; many documents and other items had been taken out of the bank without filing the proper documents in order to prevent knowledge whether those documents had been and whether they had been available at all; some bank officials had been illegally dismissed while threats had been leveled against others.
It’s obvious that the last thing the BNB and its officials had protected during the period of special supervision was the interests of KTB AD in their integrity – the interests of the depositors, the shareholders and the public. In addition, the bank was carelessly described as a Ponzi scheme based on unsubstantiated assertions of people who usually lacked competence and experience in that sphere. It’s a paradox that the bank was accused of conducting traditional banking operations.
The BNB’s attitude towards Victoria Bank also is indicative of its overall attitude towards the entire KTB AD Group as well as the double standards they used in June 2014. Maybe because they firmly adhered to the Peevski-Tzonev plan.
First, Victoria was illegally put under special supervision, in defiance of the Credit Institutions Act, in the absence of massive withdrawing of deposits. In parallel, the BNB had been trying to distort the truth by claiming everywhere it had put KTB AD under special supervision.
In fact, KTB AD sought liquidity support from the BNB after the bank run triggered by the play directed by Prosecutors’ Office and related to the fake plan for the alleged “murder” of Peevski – a fabrication the Prosecutors’ Office apologized for in after-death-the-doctor move.
After KTB was defiantly and irresponsibly denied liquidity support, the bank’s management requested it be placed under special supervision by the BNB. I stress once again that special supervision means to run the bank, not halt all of its operations and deliberately worsen its financial state.
Q: How would you explain the permission for the purchase of Credit Agricole Bulgaria, because at the time we heard opinions that the French side was very happy with the deal?
A: First, the decision of France’s Credit Agricole to sell to us its Bulgarian subsidiary indicates the level of its trust in KTB AD. As you know, the BNB gave the green light for the deal in early 2014 based on the good financial indicators of KTB AD, both in terms of liquidity and capital adequacy. No doubt, the acquisition of Credit Agricole Bulgaria EAD was a thorn in the side of the organizers of the assault on KTB AD because the attack against the bank was launched on 12 June 2014 – the day the acquisition was finalized.
Second, the BNB and its management changed their attitude towards KTB AD under pressure coming mainly from prominent personalities from DPS and their partners from other political parties. Until June 2014 the BNB had found no problems at KTB despite the numerous inspections it had made at the bank.
It’s likely that the BNB governor knowsbest what tools exactly the organizers of the assault on KTB had used to keep the BNB management team under control. For me, though, the key question is the one about personal conscience and responsibility because it is totally immoral to sacrifice public interest in exchange for having your old sins condoned. As far as the laying of blame on innocent officials and members of the management bodies of KTB AD, including myself, is concerned, blame for unhinkable, invented crimes and absurdities such as carrying cash out of the bank in bags – we’ll meet all the perjurers in court.
Q: Do you have an explanation as to why the central bank changed its position on the KTB case so many times and will we hear admissions on the issue some day?
A: As I’ve already said the central bank speaks in the words of the investigation service and the Prosecutors’Office who in turn get instruction from Berlin Hotel. It’s obvious that the BNB is doing its best to prove the framed-up points of the prosecution which are based solely on false statements and manipulation of documents as well as perverted imagination. After criminal charges against the BNB deputy governor Gunev were brought on the third day after the spectacular police search of offices of companies affiliated to me that was aired on all leading TV stations it became clear that that after years of independence the central bank has fallen into the bestial paws of politico-economic circles known for their repressive methods and strive for pillaging. It’s extremely mysterious how the prosecutors had managed to read and analyze hundreds of boxes with documents, which had been seized without proper documents certifying the seizure.
Anyway, the BNB management team fulfilled all the tasks it had been given by the organizers of the attack, including the making of public statements about cash in bags being carried out of the bank – biased fairy tales that were subsequently denied – perhaps in the hope of being awarded promised posts in the future.
- » Within 3 Years in Bulgaria There will be up to 15,000 Charging Stations for Electric Vehicles
- » Lilyana Pavlova, Minister for the Bulgarian Presidency of the Council of the EU: Bulgaria Returned to the European Agenda the Theme of the European Perspective of the Western Balkans
- » “RUSSIA’S RELATIONS WITH EUROPE AND THE USA ARE AT THE WORST I HAVE SEEN IN 20 YEARS!”
- » Russia is “Agnostic” When it Comes to Serbia-Kosovo Deal
- » Money for Innovation under New Rules
- » "Playing with Unfamiliar Territories" Boryana Ivanova - Artist, Innovator and Nomad on the Significance of Virtual Reality in Storytelling