Bulgaria’s Prosecutor-General Sotir Tsatsarov spoke on April 6 against the proposed legislative amendments that would give his office the power to temporarily suspend corporate transactions, labelling them a “dangerous precedent”.
In its first reaction since the bill was tabled last week, the prosecutor’s office said in a statement that it was “unacceptable” to give the prosecutor-general the power to suspend any company ownership transaction for a period of 48 hours, as envisioned in the bill amending the Penal Code, passed by Parliament at first reading on April 3.
The bill was tabled by GERB, the majority partner in Bulgaria’s ruling coalition, and passed with support from opposition parties, despite objections raised by the Reformist Bloc, which is part of the government. The bill was withdrawn only minutes after the MPs passed in on the House floor, but GERB MP Danail Kirilov was quoted as saying afterwards that his party would still push forward with the proposal, but amend the Judiciary Act instead.
Tsatsarov met with Prime Minister Boiko Borissov, the GERB leader, on April 6 to argue against the bill, suggesting that the proposed powers be given to the finance minister instead, the prosecutor’s office said.
During the meeting, Borissov agreed that returning wider powers to the prosecutor-general – whose power to suspend corporate transactions were taken away with amendments passed in 1997 – was controversial and it should be the finance minister, who is subject to parliamentary oversight, that should be tasked with protecting the state interest, the statement said.
The controversial bill was tabled in the context of the proposed deal in which Luxembourg-registered special-purpose vehicle LIC33 would acquire a 43 per cent stake in Vivacom, one of Bulgaria’s three main telecom operators, alongside majority stakes in several other Bulgarian companies, including telecom infrastructure firm Nurts and multiplex operator First Digital, audience research firm Garb, as well as military plants Dunarit and Avionams.
Private equity investor Pierre Louvrier, who said that he was the sole owner of LIC33, told reporters last month that his firm would buy the assets for one euro, but had committed to refinancing debt worth 900 million euro, but his news conference in Sofia failed to assuage the doubts about the deal.
(Vivacom is believed to have significant debts to the Corporate Commercial Bank, which lost its licence last year after writing down 4.2 billion leva in distressed assets, with the Cabinet lending the state fund for deposit guarantees two billion leva to cover payment of guaranteed deposits.)
The question marks surrounding the proposed deal has sparked a flurry of response from Bulgarian institutions, including the amendments tabled in Parliament. Last week, Bulgaria’s revenue agency impounded all Vivacom shares, while the country’s competition watchdog said that was not notified of any ownership change and has opened an investigation to ascertain how far have the talks progressed, pointing out that any deal required the regulator’s approval before the ownership change took effect.
However, it was unclear whether the regulator or the revenue agency could prevent the transfer of ownership in Vivacom’s parent company, which itself was owned by corporate entities registered outside the country.
(Bulgaria’s Prosecutor-General Sotir Tsatsarov. Screengrab from Bulgarian National Television)