Bulgarian prosecutors indict three auditors in CCB investigation

Written by on April 8, 2015 in Bulgaria - Comments Off on Bulgarian prosecutors indict three auditors in CCB investigation

Bulgaria’s prosecutor’s office said on April 8 that it pressed charges of mismanagement against three auditors as part of the ongoing investigation into the events that led Bulgaria’s fourth-largest lender, Corporate Commercial Bank (CCB), being put under the central bank’s administration in June 2014.

The three people are Snezhanka Veleva-Stefanova, who was head of CCB’s internal audit department, and Margarita Goleva and Krassimir Hadjigenov from the bank’s external audit firm, KPMG Bulgaria.

The prosecutor’s office said that Veleva-Stefanova did not carry out her job duties, which damaged the bank’s positions, including reduced capital adequacy ratios and diminished liquidity. The two auditors from KPMG Bulgaria, in turn, aided senior CCB executives in mismanaging the bank, breaching Bulgaria’s banking laws and central bank regulations.

In January, KPMG Bulgaria and the individual auditors who worked on CCB’s reports were fined 100 000 leva each (about 51 100 euro) for giving clean bills of health to CCB between 2009 and 2013. This was the maximum fine possible, while a vote to suspend KPMG Bulgaria’s licence did not get the necessary qualified majority in the Commission for Public Oversight of Statutory Auditors

The charges against the three auditors come only a day after prosecutors said that they indicted former central bank deputy governor Roumen Simeonov, who was in charge of bank supervision between 2007 and 2013. Simeonov failed to exercise his duties as head of bank supervision regarding CCB between February 2010 and June 2013, when his term expired, the prosecutors said.

As part of the same investigation, prosecutors have charged five former senior managers at the bank. Majority shareholder Tsvetan Vassilev was accused in absentia of embezzling 206 million leva (about 105 million euro) from the bank – he is currently in Serbia, fighting an extradition request lodged by Bulgarian authorities, and denies any wrongdoing.

(For full coverage of the CCB situation from The Sofia Globe, click here. Logo and corporate motto of Corporate Commercial Bank – “our clients are dear to us” – from a CCB advert. Screengrab from corpbank.bg)

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