A five-judge panel of the Supreme Administrative Court (SAC) dismissed on April 2 the appeal lodged by several shareholders in Corporate Commercial Bank (CCB) against the central bank’s decision to repeal the lender’s licence. The panel’s ruling is final and opens the way for a lower-rung court to resume insolvency proceedings against the bank.
The lender was put under the special supervision of the Bulgarian National Bank (BNB) on June 20 2014, when administrators appointed by the central bank took over the management from CCB’s board of directors (until they were replaced by interim bankruptcy receivers last week).
CCB was Bulgaria’s fourth-largest lender by assets at the point it was put into conservatorship, but lost its licence in November 2014 following an audit report that recommended writing down about 4.2 billion leva of impaired assets.
The five-judge panel ruled to uphold the earlier decision by a three-judge panel that the shareholders had no direct legal interest to justify litigation. The earlier ruling said that while the loss of the bank’s licence affected the shareholders’ economic interests, which they could seek to protect as part of the bankruptcy proceedings, BNB’s decision to repeal the licence was issued against CCB, so only the lender could appeal the central bank’s decision.
The panel also decided against the shareholders’ request to refer the case to the European Court of Justice, asking that the European high court interpret the EU directive to clarify whether shareholders can appeal the loss of a banking licence.
Following the SAC’s decision, the Sofia City Court will have seven days to schedule a hearing in the insolvency case, starting from the point it receives a copy of BNB’s decision to repeal CCB’s licence, specialist judiciary news website Legalworld.bg reported.
The appeal case against BNB’s decision on CCB’s licence was based on complaints lodged by Bromak, the investment vehicle of CCB majority shareholder Tsvetan Vassilev, and Bulgarian Acquisition Company, owned by an Omani sovereign fund, which had a stake of 30 per cent in the lender, as well as two complaints lodged by the bank’s former CEO Orlin Roussev and one of the minority shareholders. The SAC dismissed all other motions lodged by other minority shareholders.
(For full coverage of the CCB situation from The Sofia Globe, click here. Photo: Jason Morisson/sxc.hu)