Oman Fund Claims against Bulgaria 'Unfounded' - FinMin

Legal action taken against Bulgaria by the State General Reserve Fund of Oman is based on ill-founded claims, the country's Finance Minister Vladislav Goranov said on Tuesday.

He asserted Bulgaria was "prepared to fight this battle" and had already hired a team of lawyers.

His comments follow reports (later confirmed by the government) that the sovereign wealth fund was seeking to recover the book value of its investment in collapsed Corporate Commercial Bank (Corpbank or KTB).

It also demanded to receive interest payments for the period between June and November of last year (from the beginning of special supervision applied by central bank BNB to the court ruling that declared it insolvent).

KTB, once Bulgaria's fourth-biggest lender, was exposed to a run on deposits in June, which prompted the Bulgarian National Bank to place it under its direct administration.

The SGRF, for its part, was the second-largest shareholder of KTB, having owned 30% of it through Bulgarian Acquisition Company II S.a.r.L.

According to the fund, Bulgaria breached core principles of equal treatment of investors.

But Goranov called "ill-grounded" a move by a shareholder at a bank that has been declared insolvent to have any claims against the state.

In his words, Bulgaria "has some experience" with such cases. 

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