Ex Development Bank CEO to Head Sofia Municipal Bank

Business | November 24, 2011, Thursday // 14:00|  views

Bulgarian energy tycoon Hristo Kovachki lost control of Sofia's Municipal Bank AD last week. Photo by BGNES

The former Director of the Bulgarian Bank for Development, Alexander Chakalski, is nominated by the Sofia City Hall as Head of its Municipal Bank.

The news was reported Thursday by the Chair of the Municipal Finance and Budget Committee, Orlin Aleksiev, who is a member of the Bank's Governing Board.

The Sofia Municipality managed to regain control of Municipal Bank AD after a general shareholders' meeting held last Friday.

The former CEO of Post Bank, Borislav Moyanov, and the Director of a Branch of United Bulgarian Bank, Ivanka Popova, are the other nominations as members of the Municipal Bank management. They replace Alexander Lichev, Violeta Ilieva and Nikolay Kolev. Vasil Trenev and Georgi Belovski are keeping their posts.

The nominations must be approved by the Bulgarian Central Bank (BNB).

Last Thursday, BNB deprived from voting rights five of Municipal Bank's minority shareholders - companies connected to businessman Hristo Kovachki - thereby invalidating the blocking quota in the general shareholders' meeting, where decisions are taken with a ? majority of the represented capital, dnevnik.bg reported.

At Friday's general shareholders' meeting,  the representatives of the Sofia Municipality voted for an amendment to the articles of association providing that decisions shall be taken by a majority vote,  while decisions involving changes in the capital or the articles of association, etc, shall require a 2/3 majority to pass.

The City Hall lost their authority over the Bank, established in 1996, during the term of Mayor Stefan Sofiyanski. In 2004, part of the shareholders were changed through the privatization of municipal companies; resale of their stake at the bank to other companies, and a change of the Bank code i.e. the 2/3 majority.

It became clear shortly after that that Kovachki's businesses have a blocking quota of 27%, which helped him take over control on the Bank, making the majority owner – Sofia City Hall a hostage of its own deposits.

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Tags: municipality, Bulgarian National Bank, BNB, general shareholders meeting, municipal bank, Hristo Kovachki, sofia, City Hall, Bulgarian Bank for Development, Alexander Chakalski


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