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News 04 Sep 17

Vassilev Condemns Bulgaria Move to Buy Arms Producer

The exiled ex-banker Tsvetan Vassilev has called the Bulgarian economy ministry’s attempts to buy up the arms producer Dunarit an act of ‘robbery’.

Mariya Cheresheva
Tsvetan Vassilev. Photo: www.vassilev.bg

Exiled Bulgarian banker Tsvetan Vassilev, whose extradition from Serbia is sought by the authorities in Sofia, told BIRN that moves to nationalize the arms firm Dunarit – which has been linked to his former business empire – would be a crime.

He said it was being done with the help of the Bulgarian government and state prosecution as a favour for his powerful former business partner, the MP and businessman Delyan Peevski.

Vassilev added that the arms firm, which risked losing its export license due to an ongoing prosecution probe, had recorded annual sales of more than 50 million euros and annual profits of around 15 million euros, and so did not need state aid and control.

The Dunarit case was one of “organized crime with the participation of civil servants”, Vassilev maintained.

BIRN contacted the General Prosecutor’s office about the accusations but received no reply by time of publication.

Dunarit’s management has meanwhile not given up the fight to keep control of the arms factory.

It covered parts of its debts last Wednesday, thereby undermining the state’s case for nationalizing the plant.

Vassilev was indicted in July 2017, accused of leading an organized criminal group that had embezzled or appropriated around 1.4 billion euros from the assets his Corporate Commercial Bank, or CCB, which collapsed in 2014.

Since the bank collapsed, he has lived in exile in Belgrade, Serbia, with his family who are also wanted in Bulgaria.

The Bulgarian prosecution says he plundered the bank by using its assets to finance related companies.

The issue of who owns Dunarit continues. An analysis by the bankruptcy trustees of CCB, published in February, said an offshore company that Vassilev owned, EFV International Financial Ventures, had been the end owner of the chain of companies linked to the arms factory “for a continuous period of time”.

The trustees said this offshore firm controlled the arms plant through two firms – Kemira and Hedge Investment Bulgaria – both indebted companies which received loans from CCB.

In his interview with BIRN, Vassilev did not deny that his bank had financed the company, which bought the arms manufacturer in 2005 - Dival 59. 

He said the bankrupt company had then been turned into a profitable enterprise.

Until the state announced it intended to nationalize Dunarit, two companies were fighting to gain control over it.

These were EMCO, an arms producer, and Viafot Investment Bulgaria, which media reports have linked to the MP and businessman Delyan Peevski.

Vassilev linked the attempt by the state to acquire Dunarit to Peevski, claiming that the MP was influencing key decisions of the Bulgarian government. 

But in a written statement to the media, dated August 21, Peevski denied having any connection to any companies involved in the arms industry, including Dunarit.

EMCO’s chances of gaining control over the factory shrank late in July, when the authorities took away its license to trade.

Dunarit faced the same fate, as the three members of its board had been charged with embezzling money and funneling it to Vassilev in Belgrade.

Vassilev dismissed the charges, calling Bulgaria a “prosecutor’s dictatorship”.

He said: “Why don’t they prove it? Such a thing is easy to prove. They have access to all the documentation.”

Plans by the economy ministry to nationalize the company, by paying off its debts to the now insolvent CCB and to other creditors, are meanwhile encountering hurdles.

After Economy Minister Emil Karanikolov announced that the ministry had started buying up the debts and assets of Dunarit, last Wednesday the company surprisingly paid off part of its debt, effectively blocking the state from proceeding with the acquisition.

Dunarit CEO Krastyo Krastev told national television on Thursday that the Sofia City Court had supported its demand to stop the acquisition from occurring.

Krastev added that the company had other debts worth around 20 million euros – but assured the TV that it would cover them, too.

The ministry insists its main motive for wanting to buy up Dunarit is a desire to keep the firm going and protect its 1,300 staff.

Karanikolov has not announced yet whether he will now take further steps to assume ownership of the company in the state’s name.

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