The landmark trial on the collapse of Corporate Commercial Bank (CCB) in Bulgaria held the first hearing on the substance of the accusations levelled against 18 defendants on March 26, with a key witness for the prosecution taking the stand.
The key witness was Bisser Lazov, who worked as an accountant for former CCB majority shareholder and chief executive Tsvetan Vassilev for nearly two decades, first at another bank where Vassilev was head of currency operations and then at Vassilev’s own companies.
Lazov reportedly left Vassilev’s employment on June 20 2014, the same day that CCB asked to be put under the supervision of the central bank.
The bulk of his testimony on March 27 appeared to focus on the early years of his employment. According to media reports, Lazov said that Vassilev had frequent meetings with former prime minister Ivan Kostov, but it was not clear whether these were during the time that Kostov held office (he was prime minister between 1997 and 2001.)
The veracity of Lazov’s testimony has been contested by defence lawyers, who claimed that he was trying to avoid criminal charges, public broadcaster Bulgarian National Radio reported.
CCB, Bulgaria’s fourth-largest lender by assets at the time, asked to be put under special supervision of Bulgarian National Bank (BNB) on June 20 2014, following a bank run.
An audit several months 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 2017, prosecutors lodged the court action over the bank’s collapse, with Vassilev 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.
Vassilev 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).
After several false starts, the trial began in February 2018, but the witness testimony was delayed for months after the defence insisted that prosecutors read the full operative part of the indictment, which lists in detail the charges against the 18 defendants in this case and runs in excess of 5000 pages.
That ended last month, with the reading of the indictment curtailed after the specialised penal court ruled to take advantage of the recent penal procedure code amendments, which eliminated the legal requirement for the operative part of the indictment to be read by prosecutors at the start of each trial, replacing it with a brief summary report drafted by the court itself.
(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)