Scandal around BDB Evolving as New Details Emerge
The Bulgarian Development Bank (BDB), which by law has to support small businesses, has granted loans worth of BGN 946 only to eight private companies. Four of them may be indirectly related to Delyan Peevski, announced in his first television interview caretaker Minister of Economy Kiril Petkov. He has appointed an ad hoc commission for public control of funds, as for the sake of transparency the in-depth audit will be carried out by the audit department of the Economy Ministry and the Financial Control Agency.
The largest loan in the history of the Bulgarian Development Bank amounts to BGN 150 million. Here's how the economist and co-chair of the Green Movement Vladislav Panev commented on this case:
"Information from the Commercial Register on the largest loan in the history of the Bulgarian Development Bank. The Company "Roadway Construction" owes nearly BGN 150 million spent on purchasing "Patstroyengineering" JSC, based in a village near Momchilgrad.
That BGN150 million is paid to the previous owner of Bio Mining company - Rumen Gaitanski the Wolf. According to the state authorities, the same Bio Mining is building on the territory of the State Hunting Farm "Iskar" (where we have been waiting for months for Mayor Fandakova to issue a demolition order).
The loan is quite advantageous, not because of the interest rate of at least 3.75 percent. But because the contribution on the principal for 2020 is only BGN 170,000. Just over 0.1% of the total. The vast majority of payments are likely to be invisioned by the maturity date in 2029. By then, as the proverb goes, there‘s many a slip between the cup and the lip.
Otherwise, the debtor Roadway is in the red to the tune of BGN 3.4 million for 2019.
The consolidated assets are worth BGN 169 million, of which BGN 159 million are in the "commercial goodwill" entry. If you don't know what that means, it's the difference between the book value of an asset (the Shares of Patstroyengineering acquired by Roadway) and the price at which it was purchased. I hope the BDB have done their job well and that “goodwill” is real.
I made it public last summer in connection with the illegal construction. I hope that the new leadership of the BDB and the Ministry of Economy will clarify the circumstances. I have always expressed skepticism about this bank. Because sooner or later such structures fall under control for dubious purposes. As it has been happening, only until yesterday the national television turned a blind eye on this information.
That's why Bulgaria’s 112th position in media freedom rankings is a big problem. Because otherwise these schemes would have been exposed on time and institutions would be forced to respond. Now it's like crying over spilt milk."
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