KTB Owner Refers to EU Institutions over 'Violations'

Bromak EOOD, the majority owner of insolvent Corporate Commercial Bank (KTB), is lodging a complaint with what it calls "another gross violation of national and EU law", the company says in a statement.

According to Bromak, the decision of Bulgaria's Parliament to task the National Audit Office with auditing the banking supervision on KTB between January 01, 2012 and December 31, 2014 contravenes legal norms.

The statement sent out to a number of Bulgarian media outlets reads that the move is against EU requirements which have already been incorporated into Bulgaria's legislation.

Parliament violated "the principle of independence of national banks... the principle of independence of the banking regulator... the principle of independent external audit", the message claims, pointing to specific sections of EU directives and treaties (including the Treaty on European Union).

In line with the abovementioned principles, the National Audit Office "has no right" to conduct audits on banking supervision authorities.

Under Bulgarian law, it is only the Bulgarian National Bank (BNB) that is in charge of conducting banking supervision.

Another act violated with the move is the Law on Credit Institutions, which assigns control on banking supervision activities on the Supreme Administrative Court. This suggests, in Bromak's words, that competence was taken away from a Bulgarian court to give it to the National Audit Office.

Under the Audit Office Act (amended this year) Bulgaria's top auditing body is unable to carry out such activity with regard to banking oversight operations of the central bank BNB. What is more, the Audit Office has "no competence whatsoever" to do the same with KTB, which "is a private bank which has never managed or spent budget funds or other public funds."

The statement has been sent out to the European Court of Auditors, the European Banking Federation, the European Central Bank, the National Assembly of Bulgaria, the Prime Minister, the Minister of Finance, the Bulgarian National Bank, and the National Audit Office itself. Four Directorates-General of the European Commission have also been sent a copy.

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