Legal Changes on Bank Assignees 'Unconstitutional' - KTB Maj Owner

Business » FINANCE | March 17, 2015, Tuesday // 15:03
Bulgaria: Legal Changes on Bank Assignees 'Unconstitutional' -  KTB Maj Owner KTB's headquarters in downtown Sofia. Photo by BGNES

Amendments to the Bank Insolvency Act prepared by the Bulgarian government go against the country's Constitution, according to Bromak, the majority owner of troubled Corporate Commercial Bank (Corpbank or KTB).

In a statement sent out to the media, a number of EU directives are pointed out that could be "violated" if the amendments are passed.

Proposed changes, which were first put forward by Prime Minister Boyko Borisov after his meetings with Finance Minister Vladislav Goranov and lawmakers from various groups in Parliament, include giving the Deposit Insurance Fund (DIF) the competence to require the appointment of temporary assignees able to dispose of a certain bank's assets even before a court has ruled that bank is insolvent.

Bromak believes the move could jeopardize the independence of Bulgaria's judiciary.

Another idea could allow assignees to take action against deals retrospectively.

On Tuesday, the changes are to be discussed in Parliament. This comes a week after Borisov asked the Sofia City Court to appoint a temporary assignee to work at KTB instead of supervisors and to avoid what he describes as "looting" at the bank. His demand was rejected for being "not in line" with the current state of the Bank Insolvency Act.

Bromak's statement has been sent to most of Bulgaria's top politicians, including President Rosen Plevneliev, Prime Minister Boyko Borisov, leaders of groups in Parliament and National Ombudsman Konstantin Penchev, Justice Minister Hristo Ivanov.

EU states' Ambassadors to Bulgaria and EU Commissioner for Justice Vera Jourova have also received a copy.

KTB was exposed to a bank run in mid-June of last year that depleted its liquidity and forced it to ask the Bulgarian National Bank (BNB) to place it under special supervision.

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Tags: Vera Jourova, Konstantin Penchev, Boyko Borisov, Rosen Plevneliev, KTB, Corpbank, Corporate Commercial Bank, Bulgaria, Tsvetan Vasilev, Bromak, Hristo Ivanov
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