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Prime Minister Boyko Borisov personally intervened in another scandal with the Bulgarian Development Bank (BDB), finally resentful of the affairs of one of its oldest members, Stoyan Mavrodiev, and removed him from his CEO position, along with all the state bank board. This concludes Mavrodiev’s 2.5-year career as a banker at a state financial institution. For years, Mavrodiev’s political and administrative activity has invariably been accompanied by many scandals.
“I have ordered that the board of directors of the Bulgarian Development Bank be fired immediately.” announced Wednesday about a scandal involving a BGN 75 million loan from a bank affiliated with a collection company.
“A question that you (journalists) do not ask me, but I want to speak. I am outraged by what the Bulgarian Development Bank has done. The finance minister told me that no one had consulted him. I have ordered the Minister of the Economy, who is the bank’s director, to release the CEOs and the board immediately.“ Borisov said.
The head of the BDB is the Minister of the Economy, Emil Karanikolov.
The BGN 75 million loan was made to a company with BGN 2000 income. It is a company of Saint George Group, a company affiliated with the company for the purchase of accounts receivable from SG Group. On Monday, the BDB administration tried to justify the financing decision, explaining that it was part of a new program that the bank launched on its own initiative. “Increased liquidity in the financial system”.
Loans directed to the company would help two of the commercial banks in the market to separate part of their troubled portfolio. Mavrodiev’s explanations to “24 hours” make it clear that the banks served by the state-owned BDB are Correos and Banco Municipal.
However, Deputy Prime Minister Tomislav Donchev commented on Monday that granting the loan in this situation, which depends on BDB to apply tools to support the business affected by the co-crisis, does not sound good.
Mavrodiev, who according to official information is the most expensive state employee with a salary of BGN 36,000 per month as of 2018, has meanwhile announced that he is donating his income and promoting his work during the state of emergency.
However, he was not given the opportunity to act as a benefactor in the fight against the coronavirus because on Wednesday morning the Prime Minister announced the end of his career at the head of the BDB.
However, the problem is that the current scandal of a $ 75 million loan at the height of the crisis is entirely in line with the bank’s current policy of using taxpayers’ money in defense of its clientele, typically , big wealthy businessmen. Borisov and the government are aware of this, but have done nothing. So the main question now is not so much who the new BBI boss will be, but whether these practices will continue. And the answer seems pretty affirmative, given that the bank remains under the silent control of MRF and Delyan Peevski, according to sources in banking circles and the ruling coalition.
Stoyan Mavrodiev: I am being attacked by terrorists.
“Prime Minister Boyko Borisov was duped by false news, with the attack coming from the media group Capital, acting as the terrorist organization IRA.” Stoyan Mavrodiev submitted this thesis for deletion on the bTV classroom program at the end of the day.
He noted that the BGN 75 million deal was attacked with false arguments and was in fact completely legal and extremely profitable for the BDB and the budget.
With said BGN 75 million, Saint George Group bought a loan portfolio from Postbank (80%) and Municipal Bank (20%) worth BGN 500 million, of which BGN 150 million are secured by real estate. According to Mavrodiev, The interest and commissions of the loan will generate BBD 3 million cams per year, which will generate 30 million cams for 10 years. The deal will also benefit 8,500 citizens and businesses whose bad loans were sold to the St. George Group, because instead of selling their properties directly to banks, they will have 10 years to repay their loans.
Mavrodiev also highlighted the excellent, in his opinion, the results of BDB’s activity during the last 2.5 years, when the bank managed to increase the funds attracted from international financial institutions from BGN 800 million to BGN 3.5 billion.
The banker asked Prime Minister Boyko Borisov to take responsibility only for himself, but not for other people in the bank’s administration, who were technocrats and an excellent team. He himself remained as loyal to GERB and the Prime Minister as he is. “connected value” with the party
Who Is Stoyan Mavrodiev?
The controversy surrounding Mavrodiev dates back to his entry into politics as an economic expert at GERB. In 2007, he became famous for GERB’s super-flamboyant economic program, which promised an average salary of BGN 1,500-2,000 (not yet reached), which was later rejected.
After becoming a member of Borisov’s party, Mavrodiev introduced a new law on the Financial Oversight Commission, which removed the old leadership of the body. Later he directed the FSC. Due to misunderstandings in supervisory management under Mavrodiev’s leadership, three vice presidents left the institution. Mavrodiev had a serious conflict with former Finance Minister Simeon Djankov, and even refused to release a financial check designated by the minister.
A scandal with the criminal case against Evelin Banev – Brendo also focused on Mavrodiev, but the lawyer, who dealt with the registration abroad in the past, managed to clarify.
After a few years of oblivion, in the fall of 2017 Stoyan Mavrodiev returned to the white horse in management, this time in the role of a banker. GERB appointed him BDB head of state. He was transferred to the office of the Minister of Economy, Emil Karanikolov, after Finance Vladislav Goranov did not want to be responsible for Stoyan Mavrodiev’s controversial policy. Rather than preventing the bank from financing close-to-power entrepreneurs like Georgi Gergov, Mavrodiev reinforced it by arguing that BDB is not a fast loan company.
In the past two years, scandalous cases of huge loans of around BGN 150 million in favor of companies affiliated with Rumen Gaitanski – Wolf and Delyan Peevski have been made public. There are also reports that Peevski’s business exposure has grown to BGN 250 million, however, the latter denies having anything to do with BDB.
Over the years, the right-wing formation, especially democratic Bulgaria, has stubbornly insisted on Mavrodiev’s resignation. In parliament, Rumen Gechev of the BSP tried several times to ask for responsibility for the loans made by the bank, but this was never achieved.
It is unclear what arguments have prevailed this time to bring about Mavrodiev’s resignation. In the past, it survived even more controversial financial transactions. Although he was not loved by some of the GERB leaders, the lawyer enjoyed high-level protections.
This and next week, the BDB will launch two key government programs to help businesses in crisis: BGN 500 million in portfolio guarantees for commercial banks and BGN 200 million in interest-free loans up to BGN 1,500 for people with unpaid licenses and freelancers
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