Bulgaria’s central bank said on April 24 that it will appeal against a court ruling setting the Corporate Commercial Bank (CCB) insolvency date on the day the lender lost its licence, while also criticising a local late-night satirical TV show for airing a clip showing Bulgarian National Bank (BNB) governor Ivan Iskrov enjoying a karaoke session with CCB majority shareholder Tsvetan Vassilev.
BNB said that the court should use September 30 as the insolvency date for CCB, that being the day when BNB-appointed administrators wrote down 4.2 billion leva in impaired assets, which pushed CCB’s equity and capital adequacy ratios down into negative figures.
The decision to repeal CCB’s banking licence on November 6 was a direct consequence of the write-down, a factor that the court should take into account, the central bank said.
In the same statement, BNB said that Iskrov would not “succumb to any attempts to exercise pressure and redirect public attention” and that the central bank governor’s actions concerning CCB had been “governed by the principle of rule of law”.
The sharp response comes a day after late-night television satirical show Gospodari na Efira (“Lords of the Airwaves”) showed an amateur video in which Iskrov and Vassilev, both visibly smiling, sang a karaoke version of a folk song. Commenting on the video, one of the show’s hosts said that “I don’t believe that the old friendship between BNB and CCB had any influence on the BNB oversight of CCB. Out of the question” (video, in Bulgarian, below).
BNB has repeatedly been criticised for its handling of the CCB affair, with Iskrov repeatedly asked to step down by politicians – he has said he would do so only after Parliament elected his replacement, although current laws prevent that happening more than three months before his term expires in September.
One anonymous letter sent to Bulgarian media just days before CCB was put into administration on June 20, even claimed that both Iskrov and deputy BNB governor in charge of bank supervision, Tsvetan Gounev, “put pressure” on the bank supervision department not to apply proper oversight on the affairs of a bank “that has become the centre of attention in recent days”.
Although the bank was not named, Bulgarian media interpreted the letter to be referring to the CCB, after prosecutors had searched and seized documents “at offices of companies in Sofia” in buildings that are home to CCB a week earlier. (Gounev has also been since sacked by Parliament and indicted by prosecutors on charges of malfeasance in office for failing to exercise proper oversight of CCB’s affairs.)
BNB said in its statement that “no events of informal nature, where the BNB governor was among the invitees, have ever influenced and will never influence the principled position of the central bank”.
Update: Bulgaria’s prosecutor’s office said on April 28 that it was appealing the court ruling on the same grounds cited by the central bank.
(For full coverage of the CCB situation from The Sofia Globe, click here. Bulgarian National Bank photo: Clive Leviev-Sawyer)