Bulgarian Tycoon Sells Heating Utilities to Offshore Companies

Energy tycoon Hristo Kovachki is selling two heating utilities to offshore companies. Photo by BGNES

Bulgarian energy tycoon Hristo Kovachki has been allowed to sell two heating utilities to offshore companies registered in the Seychelles.

Bulgaria's Competition Protection Commission approved Monday the sale of the two plants.

The heating utility in the northern city of Pleven is sold to Cornworth Ltd, while the heating utility in the Black Sea city of Burgas – to Worthforth Ltd.

According to the competition watchdog, the two deals will not affect the horizontal or vertical competition in Bulgaria.

The precise ownership of the offshore companies and the price of the deals are unclear.

Only recently, Bulgarian energy tycoon Hristo Kovachki was found guilty of large-scale tax evasion by the Sofia City Court but got a suspended sentence.

Kovachki, one of the richest people in Bulgaria, was found to have evaded the payment of almost BGN 17 M in taxes to the state. Kovachki received a three-year suspended sentence with a five-year probation. The prosecution had requested 5 years in jail for Kovachki, which is the medium penalty previewed for his alleged offense (3 to 8 years in jail).

The energy tycoon was first charged with massive tax evasion in 2008 after he had just founded a political party called LIDER; his moves to get involved in politics and his facing of tax evasion charges led Bulgarian commentators to compare him to convicted Russian oligarch Mikhail Khodorkovsky. His political party failed to take off in the 2009 parliamentary elections.

Kovachki was accused of staging fake deals with equipment, biofuel and souvenirs, by means of which he is claimed to have defrauded the state with taxes amounting close to BGN 17 M (EUR 9 M).

The wealthy Bulgarian oligarch claimed that he never made fake deals, and that the equipment in question can be found in the facilities that he owns.

Kovachki is the owner of thermal power plants in Dimitrovgrad and "Bobov Dol", several mines, as well as the heating utilities in Vratsa, Burgas, Veliko Tarnovo and Pleven, the grocery chain "Evropa" and the "Atomenergoremont" company.

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