Forbes: Culprits for Events at KTB at Bulgaria's KTB Should Now Be Held Accountable

Bulgaria has now an opportunity to call to account those responsible for the developments at Corpbank, with "prosecutions and jail sentences where appropriate", an article on Forbes magazine's website reads.

In the text published a day after the Bulgarian National Bank (BNB) revoked the license of Corporate Commercial Bank (KTB or Corpbank), Frances Coppola, who oftern writes about developments, at KTB, says the move will give "a huge relief" to insured depositors who were previously unable to access their money.

The author alleges KTB was kept "afloat from March to June 2014" with "at least the connivance of the same people who started the bank run that brought it down."

Coppola cites the BNB's report available on the central bank's website according to which Corpbank "self-funded its own Tier2 capital with a complex web of circular lending transactions involving an investment company called TC-IME and a host of smaller intermediary companies."
 
Giving further account on TC-IME, the author adds that between 2007 and 2009 Bromak OOD and Ken Trade, both companies of Corpbank majority shareholder Tsvetan Vasilev, owned 49 and 51 percent of TC-IME respectively.

She says "both Bromak and Ken Trade were intermediaries" in the scheme, which in her words means Vasilev himself has been able to help the bank to "self-fund its own capital."

A publication of the Bulgarian website Bivol is also cited reporting of the "complex ownership structure" of the Bulgarian television channel TV7 and of "common interests" of Vasilev and controversial DPS lawmaker Delyan Peevski's mother Irena Krasteva as of October 2013.

The same report shows that a few years back Krasteva and Vasilev had both been on the board of United Bulgarian Newspapers Corp. But Krasteva, who had bought New Bulgarian Media Group Holding, a newspapers corporation, purchased in 2009 all shares of TC-IME thus replacing Vasilev on the board just before the 2009 general election. Reportedly, she used a loan from Vasilev to strike the deal.

This means Krasteva owned TC-IME, the structure used to fund KTB, and makes her son Peevski's decision to "pull the plug on KTB" a few years later somehow surprising, but could be hypothetically be explained with inability repay loans to the bank, the article reads, reminding Vasilev's insisting that " the motivation for bringing down KTB was unwillingness on the part of (unnamed) major debtors to repay their loans."

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