KMPG to Carry Out 2011 Audit of Sofia Municipal Bank

Business | December 8, 2011, Thursday // 12:27|  views

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Accounting firm KPMG will be tasked with auditing Municipal Bank AD in 2011, the Bulgarian Telegraph Agency reported on Thursday.

The proposal is to be approved at the bank's general shareholders' assembly scheduled for December 27.

The auditing of the financial institution over the past ten years was carried out by Deloitte Audit.

The Sofia Municipality regained control of Municipal Bank AD after a general shareholders' meeting held on November 11.

On November 10, the Bulgarian National Bank (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.

At the general shareholders' meeting held on November 11, 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 Sofia Municipality holds a 67.51% stake in Municipal Bank AD, meaning that it can already take key decisions single-handedly.

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.

On November 29, Municipal Bank reshuffled its management structure, appointing Georgi Belovski and Alexander Chakalski (former Director of the Bulgarian Development Bank) as executive directors and Borislav Moyanov (former CEO of Post Bank) and Ivanka Popova (Branch Manager at United Bulgarian Bank) as members of the Management Board.

The new management of Municipal Bank has voiced plans to impose staff cuts and focus on energy efficiency projects.

Municipal Bank also intends to get actively involved in retail banking and providing financing to small and medium-sized enterprises.

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Tags: KPMG, municipal bank, Hristo Kovachki, Sofia Municipality, Alexander Chakalski, Bulgarian National Bank, BNB


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