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News 30 May 17

Bulgarian Tycoon’s Serbian Factory Awaits Bankruptcy Ruling

A court is due to decide on the potential bankruptcy of Serbian Glass Factory, amid claims of falsified debts and accusations against its owner, Bulgarian tycoon Tsvetan Vasilev.

Maja Zivanovic

Tsvetan Vasilev. Photo: Media Centre Belgrade

The local court in the Serbian town of Kragujevac will decide on May 30 whether to launch bankruptcy proceedings against Serbian Glass Factory, a company from the town of Paracin that employs over 800 people and is one of the backbones of the local economy.

According to the Serbian National Bank, Serbian Glass Factory's accounts have been blocked since November 2016.

The company Vexillum Balkans in February filed a request for Serbian Glass to be declared bankrupt owing to alleged debts of around 47 million euros on May 5.

Vexillum Balkans says the company acquired the debt that Serbian Glass Factory had towards its parent company, the Bulgaria-based firm, Glass Industry.

According to the Serbian business registry, a consortium of companies owned by Bulgarian tycoon Tsvetan Vasilev, including Glass Industry, owns most of the shares in Serbian Glass Factory.

In 2012 and 2013, Serbian Glass received money through four loan instalments from the Bulgarian parent company.

However, the factory’s lawyers dispute the debt and, in mid-May, Serbian Glass filed lawsuits against six people - including Vasilev.

The attorney for Serbian Glass, Branislav Tomasev, told BIRN that the factory held the group, including some previous managers and lawyers, responsible for wrongdoing and mismanagement.  The company also believes the size of its debts has been falsified.

Vasilev has declined to comment about the charges.

Worried factory workers organised a protest on May 14, calling on the Serbian government to rescue the firm from bankruptcy.

On May 13, Mikica Simic, from the factory’s trade union, told the news portal iKragujevac that he feared bankruptcy would mean workers being fired without redundancy agreements.

Workers also fear this would enable an eventual new buyer to purchase the company on the cheap.

Vasilev initially bought the firm in 2006. After the factory’s debts to gas and electricity utility companies mounted, the gas company, Srbijagas, converted its debt into shares in 2009. In 2012, it sold its stake in the company again to Vasilev.

He bought 63 per cent of the shares in the company through a consortium of companies, Corporate Commercial Bank, Glass Industry and Rubin. Vasilev even obtained a write-off of the company’s debt to other state companies.

But, in 2014, Vasilev’s private bank in Bulgaria, Corporate Commercial Bank, collapsed in by far the biggest bank collapse in the history of Bulgaria.

Since the collapse of the bank, the controversial businessman has lived in Serbia.

Bulgarian authorities have been seeking his extradition for running a ponzi scheme and for illegally acquiring 206 million leva [103 million euros] in assets from the failed bank.

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