Bulgaria MPs to Make Report on Insolvent KTB Public

Finance | March 11, 2016, Friday // 10:41|  views

The headquarters of KTB in central Sofia. Photo by Christina Dimitrova

Lawmakers have voted to approved changes to the Bank Insolvency Act on a first reading which also allow for the publication of a report by UK-based consultancy AlixPartners on insolvent Corporate Commercial Bank (Corpbank/KTB), local media have reported.

Until now the text was only available in Parliament's secret registry, which was not accessible to the general public but only to lawmakers.

The act's Artile 12a (2.12) will read that: "The temporary trustee is obliged, regardless of confidentiality clauses in contracts, to publish the report on its webpage after receiving it from those contracted for this purpose."

Instructions on receivables collection offered in the report will not be disclosed to avoid disruption of the work of receivers.

An overwhelming majority of 124-0 (4 abstained) approved the changes.

KTB was declared insolvent after being placed under special supervision by the Bulgarian National Bank following a bank run in June 2014.

The issue of publishing the document has sparked much controversy since Finance Minister Vladislav Goranov demanded the publication in February.

The report was earlier classified as "strictly confidential", with AlixPartners warning against a move to make it public as it includes "a considerable amount of personal data on KTB customers and their accounts".

However, the consultancy firm had "reluctantly" agreed that MPs can have access to the report in the secret registry.

Some lawmakers dealing with economic and financial issues had also objected, with Menda Stoyanova, who heads the Budget and Finance Committee at Parliament, warning the move would send a message to investors that Bulgaria is again violating legal and economic principles.

The Bulgarian Deposit Insurance Fund (BDIF) has also objected to the amendments.

KTB receivers had contracted AlixPartners in June 2015 to track assets, which KTB had administered in violation of the law and good banking practices, and recommend recovery options. The report was submitted to the KTB receivers on 23 September 2015.

The Bank Insolvency Act amendments were submitted by several lawmakers from liberal Movement for Rights and Freedoms (DPS) party, including Yordan Tsonev, former Finance Minister (2013-2014) Petar Chobanov, and Delyan Peevski, an alleged media mogul and former business partner to KTB majority owner Tsvetan Vasilev.

Media reports have repeatedly linked the collapse of KTB to the fallout between Peevski and Vasilev, with the latter describing the developments as looting of his bank aided by Bulgarian authorities.

Peevski, on the other hand, has long maintained together with Tsonev that legal changes should allow the revelation of "the entire truth" about Corpbank to the public.

Rules for cashing assets in filling up the insolvency mass will also be amended, in accordance with proposals submitted by other lawmakers. Only trustees and the BDIF will be made familiar with assets' value to ensure no information will be leaked out and auctions will go smoothly.


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Tags: Corporate Commercial Bank, Corpank, KTB, Alixpartners, Vladislav Goranov


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