Political repercussions of sale of Bulgarian assets of CEZ continue

Written by on February 25, 2018 in Bulgaria - Comments Off on Political repercussions of sale of Bulgarian assets of CEZ continue

Political fallout from the deal to sell the Bulgarian assets of Czech energy company CEZ to Bulgarian firm Inercom is continuing, with Prime Minister Boiko Borissov calling for the security and revenue agencies to investigate the deal, and socialist opposition leader Kornelia Ninova calling for the state to buy the assets itself.

On February 24, the government information service said that Borissov had asked the State Agency for National Security and the National Revenue Agency to conduct a full investigation into the deal.

Borissov said that the energy regulator and the Financial Supervision Commission should be involved in the investigation. The heads of the National Revenue Agency and the Financial Supervision Commission had told him that they would immediately begin investigations, the government statement said.

Bulgarian Energy Minister Temenouzhka Petkova submitted her resignation from her post on February 23 at Borissov’s request, saying that she did not want there to be suspicions about the deal because she had been friends with Inercom owner Ginka Vurbakova for 20 years.

The partners in the ruling majority, Borissov’s GERB and the nationalist United Patriots, are discussing who will succeed Petkova as energy minister. GERB parliamentary leader Tsvetan Tsvetanov said that the new appointee would come from the GERB quota. It is expected that the name will be announced by February 28.

In an interview with Bulgarian news agency BTA, Vurbakova denied speculation that Inercom was a front for undisclosed business interests. The transaction was to be funded by a loan from a “major international bank with a high credit rating,” she was quoted as saying.

Bulgarian Socialist Party leader Kornelia Ninova described the transaction as a backstage deal, saying that there were many questions, such as how a newly-created company with a capital of 50 000 leva (about 25 564 euro) could buy assets for 320 million euro. The state should buy the assets, Ninova said.

On February 24, Borissov poured scorn on Ninova’s comments.

The CEZ deal was taking place in the Czech Republic, he said.

“The colleagues from the BSP, let’s accept that they are saying in good faith that the state should get 380 million euro to buy (CEZ’s Bulgarian assets). First, why did they sell them? Why, at the time of their government in 2005, did they not buy them back, and why only buy CEZ, why not Energo Pro and EVN, why not buy them too?” Borissov said, referring to the two other energy distributors in Bulgaria.

“If we buy like that, why don’t we buy Neftochim Bourgas, why don’t we buy the banks back, why only CEZ?” Borissov said.

He said that this was a deal between two private entities, and emphasised again that state regulators would be looking into the deal.

Politicians from a number of minority parties outside Parliament commented negatively on the deal, emphasising in particular that the buying company was recently-founded and raising questions, in spite of Vurbakova’s denials, about who was “behind” the deal.

On February 23, former energy minister Traicho Traikov, who held that post in the first of Borissov’s three governments before being dismissed and now is part of extra-parliamentary opposition to GERB, likened the deal to “allowing a fifth-grader to fly a passenger aircraft”.

“Nothing is right in this deal,” Traikov said in a television interview, adding that he found it strange that a company worth several thousand leva and with a staff of 20 was acquiring a business as colossal as CEZ. He said that he had heard of Inercom only last week when it emerged that it was short-listed to buy the CEZ assets.

(Photo via the Facebook page of CEZ)



About the Author

The Sofia Globe - Bulgaria’s fully independent English-language news and features website, run by an all-expatriate team. Sign up to subscribe to sofiaglobe.com's daily bulletin by using the form on the homepage of our website. Please click to support our advertisers!