False start in Bulgaria’s Corporate Commercial Bank embezzlement trial

Bulgaria’s special criminal court was unable on December 13 to start proceedings in the trial related to the collapse of the Corporate Commercial Bank, an expected outcome in what is shaping up as one of the most complex and high-profile cases in the country’s recent judiciary history.

CCB, Bulgaria’s fourth-largest lender by assets at the time, asked to be put under special supervision of the Bulgarian National Bank (BNB) on June 20 2014, following a bank run. An audit several month later found that the bank held mainly impaired assets, requiring a write-down of 4.22 billion leva (about 2.16 billion euro), which led to CCB losing its banking licence in November 2014 and triggered the payout of 3.7 billion leva in depositor claims, which required a government loan of more than two billion leva for the state deposit guarantee fund to meet all claims.

In July, the country’s prosecutor’s office said that it concluded its investigation into the events preceding the bank’s collapse and indicted 18 individuals as part of the investigation, starting with Tsvetan Vassilev, former majority shareholder and chief executive of CCB, who is currently in Serbia and has been successfully fighting off extradition requests lodged by Bulgarian prosecutors.

Vassilev claims that the investigation against him is politically motivated and blamed the events that led to CCB’s insolvency on his former business associate Delyan Peevski, the controversial MP for the Movement for Rights and Freedoms (MRF).

The trial’s failure to launch was on procedural grounds, with presiding judge Virginia Petrova ruling that Vassilev had not been properly notified to appear in court.

In a statement, the specialised prosecutor’s office said that an attempt has been made through the Justice Ministry to hand the trial evidence to Vassilev and his attorneys, but no answer from Serbian authorities had been received yet.

Vassilev’s lawyers, present for the December 13 court hearing, had declined to take the court materials despite being legally allowed to do so in the absence of their client, the prosecution said.

According to report by news website Mediapool.bg, Vassilev’s legal team said that they were not authorised to accept the court materials and Vassilev had the right to be notified of the court proceedings using the proper channels.

Additionally, one other defendant had a new lawyer that had yet to become familiar with the court materials, while a second defendant had yet to find a new lawyer after the death of their previous counsel.

Beyond Vassilev, a number of former senior officials at the lender have been accused of being part of the organised crime group that Vassilev is alleged to have led and spearheaded. Some of them, but not all, are also facing embezzlement charges. Two auditors from KPMG Bulgaria are also facing embezzlement charges, while three former employees of the central bank – including former deputy governors in charge of bank supervision Tsvetan Gounev and Roumen Simeonov ­– have been indicted on charges of mismanagement.

Vassilev was indicted on a total of 146 counts. He and the other defendants are alleged to have embezzled a total 2.56 billion leva (about 1.31 billion euro), as well as 205.9 million leva in cash.

The prosecutor’s office statement said that its full bill of indictment and the evidence submitted to the court spanned more than 210 000 pages in 1360 volumes, including the results of questioning more than 400 witnesses and 90 forensic reports.

(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)



Alex Bivol

Alex Bivol is the Deputy Editor-in-Chief of The Sofia Globe.