Sofia City Court will hold the first hearing in the insolvency case against Corporate Commercial Bank (CCB) on April 15, reports in Bulgarian media said on April 3.
Presiding judge Ivo Dachev has scheduled the hearing for the earliest day possible, the court said as quoted by specialist judiciary news website Legalworld.bg (Bulgaria will celebrate Easter with a four-day public holiday on April 10-13).
The court subpoenaed the interim receivers to represent the lender, the Bulgarian National Bank (BNB), the state fund for deposit guarantees, Sofia city prosecutor’s office, as well as the two largest shareholders in the bank – majority shareholder Tsvetan Vassilev’s investment vehicle Bromak and Bulgarian Acquisition Company, owned by an Omani sovereign fund, which had a stake of 30 per cent in the lender.
The insolvency proceedings against CCB were opened in November, after BNB revoked the lender’s banking licence, but had to be suspended as shareholders appealed the central bank’s decision. The proceedings are being resumed after the Supreme Administrative Court ruled on April 2 to reject the appeal, arguing that shareholders did not have the direct legal interest to justify litigation.
Insolvency proceedings were the latest development in the saga surrounding the bank, which was Bulgaria’s fourth-largest lender by assets at the point it was put into conservatorship by the BNB on June 20 2014 following a bank run on deposits, with 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 and its majority shareholder Vassilev have been alleged, over the years, of enjoying inordinate support from several Bulgarian governments and attracting the bulk of corporate deposits by large state-owned companies. It has also been alleged that Vassilev used loans given by the bank to companies he controlled to invest in various industries, including telecoms and media.
He is also under investigation on charges of embezzling 206 million leva from the bank, which he denies, and is currently in Serbia, where he is fighting an extradition request lodged by Bulgarian authorities.
After auditors last year recommended writing down about 4.2 billion leva of impaired assets, the main question facing the Cabinet is recouping as much money as possible from CCB after the government was forced to lend two billion leva to the deposit guarantee fund to pay out all guaranteed deposits in the bank.
The saga has also raised questions about BNB’s supervisory failures, with an ad hoc Parliament committee set up last month to investigate the conduct of state bodies and institutions meant by law to exercise control. BNB governor Ivan Iskrov has faced repeated calls to resign, but he has said he would do so as soon as MPs elected his replacement – not legally possible under Bulgarian law, which stipulates the exact terms of when the election of a new central bank governor can commence.
On April 3, a group of MPs from the ruling coalition and the opposition parties tabled a draft resolution in Parliament, asking the National Audit Office to carry out an audit of BNB’s bank supervision between January 2012 and December 2014.
(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)