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During the last two months the media published and the televisions broadcasted dozens of comments and
opinions related to the facts, statements, comments of the politicians participating in the consultative
meetings with President Plevneliev and the consequences from them both in regards to the development
of the Corporate Commercial Bank (CCB) case and their impact on the economic, political and
corruption situation in the country, which apparently reached its peak in the period between 2014 and

Our organization of the victims of the theft of the century presented also our initial impressions from
the long-expected transcripts dated 29.06.2014 and 14.07.2014, however, now comes the turn of the
serious analysis, as we can compare only now the small number of authentic documents on the case of
the CCB with the statements and the decisions of the transcripts that became publicly accessible
recently. Not completely, indeed! However, the main official accounting and analytical documents
related to the CCB remain the most strictly guarded secret in the state.

Main Conclusions from First Declassified Transcript Dated 29.06.2017

Let us remind the main conclusions which both the society and we made after we read the first published
transcript dated 29.06.2014:

1. The bank run has occurred categorically after the unmeasured and illegal actions of the state
institutions (the National Security State Agency, the Prosecution Office) against CCB and after
media insinuations organized by the interested circles which should bear the blame and
responsibility for the consequences.

2. The controlled attack against CCB, which started with imposed by the Government withdrawal
of the funds of the state companies from CCB (identified BGN 70-80 millions of withdrawals
and transfer of funds without taking into consideration the authorities and organizations related
to them municipalities, state hospitals, etc.) and with the invasion of masked special units,
prosecutors and police in bank offices, has gone out of control and has caused liquidity problems
at further 16 banks. These circumstances by themselves represented at that time a threat for the
national security of the country, which is also a member of NATO and the European Union. All
prerequisites, as well as the greater part of the officials who are yet to bear responsibility, are
still current and persisting. That is, the same events could happen any moment and the threat to
the national security of the country remains currently valid.

3. The problem of CCB and the other 16 banks in June 2014 is identified as LIQUID ONE AND
NO OTHER. The adopted decision is the only one possible rendering of state assistance to all
affected banks. This decision is implemented in regard to all other banks with the exception of

4. The bank crisis and the fears of people have been used with political purposes for bargaining
and transferring the power in the hands of political party Citizens for European Development of
Bulgaria (GERB) through snap extraordinary elections.

5. The mutually accepted conditions of the transfer of power exclude and de facto GUARANTEE
the impunity of all those present at the meeting politicians from all parties represented in
Parliament and the opposition, the Government, the leading decision-makers- the Governor
and the Deputy Governors of the Bulgarian National Bank (BNB) with a promise not to follow
and not to have public pointing out, passing censure on and sentencing the real guilty persons
and institutions. In its essence, the agreement, according to the transcript, represents alibi against
guilt and future court cases and guilt-free indulgences. This allows for the subsequent, this time
not fictitious, but real robbery of the assets of CCB in favour of a small number of persons and
companies from the circles around all political parties and most favoured are persons of
companies close to or associated with the Movement for Rights and Freedoms (MRF) and

6. The achieved agreement for provision of guilt-free indulgences has been observed and despite
the apparent evidence of guilt of the Finance Minister, the Prime Minister, the members of the

Governing Council of BNB, as well as the organized group of media and their owner (who is not
mentioned, however, it is known by the public that he is the MRF Member of Parliament and
oligarch Delyan Peevski), despite the unquestionable data and foundations, have not been even
checked by the Prosecution Office for involvement in the overall process of the bankruptcy of
CCB and the factual destabilization of the overall bank system. It actually exists, despite the fact
that the consequences have been mastered through spending of significant public funds.

7. The deception with the evaluation of the financial status of CCB on the basis of 2 audits a
10-day audit and a three-month audit was prolonged by the European Commission. The
latter is due to apathy or lack of professionalism and/or because of pressure exercised by the
Bulgarian Members of the European Parliament and the Bulgarian Commissioner, particularly
along the line of the European Peoples Party, legalized, both de facto and with documents
through the Reports on the Disbalances in Banking and Financial System of the Republic of
Bulgaria, the robbing of the Bulgarian citizens and entrepreneurs and consolidated the the
oligarchic-mafia model of banking and of governing of the state.

Major points of the political decisions made in the transcript of 14.07.2017: reasons and motifs for
withdrawal of the license of CCB and analysis of the arguments for this decision and the role of
the participants for the robbery of the century.

The facts so far:

Bankruptcy of CCB due to withdrawn on November 6, 2014 license for performing bank
activity due to negative value of the own capital of CCB AD of the amount of minus BGN 3.7
billion and because of the fact that the bank does not meet the capital requirements of
Regulation (EC) No.575/2013 because of impairment of assets of CCB AD of a total amount of
BGN 4,222 billion and the capital deficiency of BGN 3.7 billion;
A credit portfolio impaired by 92.3 %, that led to a capital loss and capital inadequacy;
Under pressure and on the basis of unregulated and untransaparent arangements and in striking
contradiction with the European practice and precedents of court decisions, the Supreme
Administrative Court and the Sofia City Court after that did not allow the consideration in their
essence of the issues related with the lawfulness of the withdrawal of the bank license of CCB
with motif of absence of legal interest;
At least BGN 3.7 billion as guaranteed deposits paid by the Bulgarian Deposit Insurance Fund
(BDIF), and the sum was increased by amounts, which were not due and those facts were
ignored by both the Prosecution Office and the judicial system;
With deposits of BGN 6.260 billion as at 30.09.2014, the loss of about 8,000 companies and
individuals is calculated at BGN 2.560 billion (with BGN 2.7 billion due in case BDIF would
have paid only the legally due minimum guaranteed deposits);
The sum of BGN 570 million (BGN 240 million for the depositors and BGN 330 million for
BDIF), envisaged by the insolvency assignees for distribution to 7,022 depositors represents
insignificant part of the loss of the private depositors (or about 11 % of the deposits lost by
The amount to be distributed by the receivers for the private unguaranteed depositors
corresponds to deposits of about BGN 2.180 billion and there are no legal grounds for the
complete removal from the list of creditors of hundreds of companies and individuals. The
difference of over BGN 380 million was lost in unknown fund-raising accounts, which could be
used for embezzlement of assets only, rather than for anything else. The reduced amount of the
sum to be distributed by the assignees to the depositors is indicative for the third robbing in a
row of this part of our members who had assignment contracts and deductions validated by the

conservators that were later attacked by the assignees and declared null and void by court. As
well as of those, whose objections without grounds were not accepted and they cannot lead court
proceedings for them, as the independent court system punished them by 4% stamp duty,
interpreting their objections as action for declaratory judgement. In both cases cash was not
returned to their accounts and is used for other purposes in a criminal way. Indeed, most
probably the offset of [Italian investor in wineries, textile and other industries in Bulgaria
Edoardo] Miroglio in Dounarit, which is already in the hands of the well-known offshore
company Viafot, as well as the ones related to the First Investment Bank, again with Delian
Peevski, the friends of Boyko Borissov in Rubin AD, and others, were not attacked at all
About BGN 580 million in cash and about BGN 600 million in securities found by the
conservators in the Bank, were used by the conservators, assignees, their lawyers, associates,
private judicial enforcers mainly to guarantee unreasonably high honoraries and remunerations,
thus determining the low amount of the sums allocated for distribution to depositors. They are
distributing only the cash they found in the bank. The BGN 176 million collected by them,
according to a publication on their site, were intended to secure their sophisticated and
responsible activity related to servicing, taking care of and safeguarding the thieves!

What are, according to the records of the second transcript of the meeting with President Plevneliev on
14.07.2017, the emphases, reasons and motifs expressed by President Plevneliev, politicians Boyko
Borissov, Lyutvi Mestan, Atanas Merdzhanov, Roumen Gechev, Yordan Tsonev, Menda Stoyanova,
etc., by Chief Prosecutor Sotir Tsatsarov and the members of the BNB Governing Council Ivan Iskrov,
Dimiter Kostov, Kalin Hristov that led to the decision for liquidation of the fourth biggest systemic bank
CCB both regarding its size and its importance for the country? The most important factor for the
decision-making is the statement of the Chief Prosecutor Sotir Tsatsarov assisted by the mumbling
[BNB Governor] Ivan Iskrov and his deputies.

Our analysis, conclusions and hypotheses are based on several main documents:

First, on the reports on the status of CCB, prepared between 26.06.2014 and 09.07.2014 by the
companies Deloitte Audit, Ernst and Young Audit EOOD and Afa OOD and their contracts for rendered
consultancy, although signed at a later date.

Both groups of documents, which we discuss herein, are copies with the attributes of the original
documents, with initialled pages and signatures of the managers of the companies. Although they were
sent to us anonymously, we can present them upon request. It is also necessary to say, that in the
beginning and in the end of these reports as at July 9, 2014, as well as in the consulting services
contracts themselves, signed post-factum (in August 2014), there is a number of conditions and
restrictions of the commitment, regarding the use of the information in them including. We cite an
extract from the report of Ernst and Young, however, they are also present in the three reports:

- The negotiated procedures are based on the available information regarding the respective assets
and liabilities and do not include any legal analysis of the validity of the receivables and
obligations, of the provisional commitments and of the collaterals of the bank;
- They do not include any evaluation of the collaterals and of the investments of the investment
portfolio of the Bank;
- The consultants did not conduct any procedures and do not include in their report calculations
and comments regarding liquidity, capital adequacy or non-observance of regulations and
legal requirements in respect to equity and big exposures to related persons;
- No procedures were carried out regarding derivatives, other assets and other liabilities, as well
as other reserves, subordinated liabilities, tangible assets, incomes and expenses, etc., except the
ones pointed out in the contract;

- The consultants did not get in contact with borrowers for confirmation of facts regarding credit
transactions and balances and no analysis was conducted regarding the financial status of the
borrowers on the basis of another information unless the one available in the credit files;
- The consultants did not request confirmation of balances regarding corporate securities in the
investment portfolio of the bank.

Therefore, as it is recorded in the procedure contracts and in the reports on them, The performed
procedures do not represent an audit or a review conducted in compliance either with the
International Audit Standards or the International Standards on Review Engagements, we do not
express any assurance regarding the findings that were established as a result of the agreed

If we have performed ....... an audit or a review of the provided information in compliance with the
International Audit Standards or the International Standards on Review Engagements, other
issues might have come to our knowledge which we could have reported to you.

Our report about actual findings is intended only for the purpose expressed above and is for your
information, due to which it should not be used for any other purposes or to be distributed to
other parties besides the addressees of the report (the conservators) and the Bulgarian National
Bank. (Ernst and Young OOD)

Second, of the Report of a Supervisory Inspection of the Corporate Commercial Bank with
outgoing No. BNB-125089/27.10.2014 made by the Banking Supervision Department, Supervisory
Monitoring of Credit Institutions Directorate, which has started on the grounds of Order No. BNB-81651
dated 03.07.2014 related to Article 4 of the Bulgarian National Bank Act, Article 79 and Article 80 of
the Credit Institutions Act, the order for which was signed by Neli Kordovska for a Deputy Governor of
BNB. A total of 22 inspectors participated in the inspection, and it was signed by Gergana Batinkova,
Ralitsa Lazarova and Anelia Alexandrova who were team managers. The report was coordinated with
the Director of the Supervisory Monitoring of Credit Institutions Directorate (Bank Supervision Policy
Directorate) Tatyana Petrova and was reported to the Governance of BNB. It is prepared in triplicate
(according to the practice of the Banking Supervision Department, similar reports are usually prepared in
duplicate) for BNB, for the conservators and for the Prosecution Office. The license of a bank can be
withdrawn in no case on the basis of this report.

For the purposes hereof, it is necessary to point out the stages and the timing of the inspection, as the
period which we are studying is from June 20, 2014 to July 12, 2014, as the main source tracing the
decisions of the CCB case are the two transcripts of the Consultative Meetings of the parliamentary
represented political parties with President Rossen Plevneliev that took place on 29.06.2014 and

The supervisory inspection was carried out on 3 stages and with three different objectives:

First stage from 04.07.2014 to 07.07.2014

Task and objective: Establishing the completeness of the credit files, which are bases of an object of
review from the last supervisory inspection (31.03.2013), as well as of new bigger expositions.

Range The conclusions of the inspection are based on the checked 146 credit files of 66 borrowers as
at 31.05.2014 of a total carrying amount of BGN 2,481,303,000.

Sources of information The credit files are provided by Deloitte Audit OOD, Afa OOD and Ernst and
Young Audit OOD without any inventory of the documents included in them. The conclusions of the

inspection are based only on a review of the available documents in the files in most of the cases
copies of the originals.

Second stage from 09.07.2014 to 11.07.2014

Task and objective: Evaluation of the administration of the credit files and determining the level of the
credit risk by individual credits extended after 31.03.2013, as well as credit transactions, which were not
included in the excerpt of the ones reviewed during the last inspection.

Range On the basis of the excerpt of the credit portfolio, the inspection reviewed 102 credits of legal
entities, whose gross value is of the amount of BGN 2,162,023,000.

Sources of information The conclusions are made on the basis of reviewing the available documents
received by the audit enterprises and the employees of the bank, as well as of data from the credit
portfolio as at 30.06.2014.

Third stage from 15.07.2014 to 09.09.2014

Goal review of the parameters of the transaction, as well as the tracing of the cash flows related to the
absorption of the funds of extended credits and their servicing Check of the fair value of collaterals.

Range Review of movements in settlement and loan accounts of 91 credit exposures of a total gross
value of BGN 3,710,407,000 as at 30.06.2014. During the course of the inspection, a total of other 84
credit files were reviewed aiming at completing of the clarifying excerpt.

Sources of information The conclusions of the inspection are based on a review of copies of
documents and credit files, received from employees of the bank and an assistant conservator, as well as
of data of the credit portfolio as at 30.06.2014 and 31.07. 2014.

During the whole period of the check, the inspection team worked only with copies of documents of the
credit files and they were provided only a passive access to the accounting system of the bank for tracing
the cash flows in the accounts of the borrowers from the reviewed excerpt and other customers of the
bank, whose total number is over 1,000.

Until the conclusion of the inspection on-site, the conservators did not submit the documentation
required currently by the inspection team, which was missing in the copies of the credit files presented
for the check. It was essential for the formation of a supervisory opinion regarding the credit risk
undertaken by the bank, its reduction and the potential of the borrowers for servicing their obligations to
the institution data about the due pledging regarding the credit transactions in favour of the bank, the
current financial statements as well as any decoding to them. Part of the requested information, copies
again, was provided by the conservators barely on September 24-25, 2014.

Third, we will use the statements of the politicians and magistrates at the first and, particularly at the
second Consultative Meeting with President Rossen Plevneliev as a basic source of information.

Including any other documents and sources in this analysis is irrelevant in the context of the facts: the
decisions regarding the destiny of CCB were offcially taken on 14.07.2014 and all other developments,
reports of parliamentary committees and international swindlers have had one task only to compile and
manipulate the data in such a way that to give them externally acceptable explanation for the withdrawal
of the license of CCB, the robbing of the Bulgarian, and not only, citizens and companies and the
accompanying economic and social changes in society as a result of this robbery.

The main points, reasons and motifs that have led to the decision for liquidation of CCB

Auditors hired as consultants or consultants instead of auditors

First, we will pay particular attention to the statements of the bankers from the Central Bank and the
analysis (the statement) of the Chief Prosecutor, based on the consultants inspection of the assets of
CCB, called by all politicians and Central Bank bankers AUDIT. The inspection is conducted on the
grounds of contracts in compliance with the International Standard on Related Services (ISRS) 4400,
Engagements to Perform Agreed-Upon Procedures Regarding Financial Information with Deloitte Audit
and Deloitte Bulgaria (not licensed as auditor), Ernst and Young and AFA (licensed as auditors), and the
credit files of 137 borrowers were reviewed from June 26, 2014 to July 9, 2014. According to the
consultants and the politicians, these 137 files represent about 92% of all extended credits.

The consulting companies worked after a methodology, which was one and the same for all of them and
that was approved and recommended by BNB, and each company received between 35 and 50 credit
files to study.

All three consulting companies divided conditionally the assets of borrowers studied by them in four

The first two categories of borrowers represent group 1 regular credits without any need of additional
impairment, and group 2 credits, for which there are indications about incomplete recovery (most often
minimum delays in servicing the credits).

To say the least, it is surprising, especially in the context of the Bulgarian business reality that this
group includes companies, which, first, have indications for deterioration of their financial status due to
drop in revenues or profit before taxation, as if fluctuations in the financial results of a company happen
for the first time in the history of economy. Such conclusions concern many of the really working
enterprises - clients of CCB, including the biggest companies of the military-industrial complex such as
Arkus, Avionams, Dunarit, etc., and under the conditions of the still going on crisis in Bulgaria caused
by the world financial crisis in 2007-2009. It is just the financial support of CCB that allowed these and
dozens of other enterprises to pass through this period and not go bankrupt.

Second, the consultants connect the indications of some companies to possibly not be able to service
their credits with the fact that some of them were created in less than 12 months before receiving a credit
from CCB.

And then what explanation would be given to our questions why [thermal power plants] Maritza East 1
and Maritza East 3 were sold to newly established offshore companies: AES-3C Maritza East 1 is a new
offshore company registered on Mauritius Island? Despite the fact that the US company has stated that
it is the owner, another offshore company, Dominion Development Company, of not quite clear capitals
and final beneficiaries, owns 12% of it. Why the large scale of assets of the Bulgarian heavy industry
were sold not only in the period of wild privatization to newly established companies, which received in
their major part credits from Bulgarian banks without providing any collaterals? Why the Diplomatic
Club in Sofia was recently sold for BGN 8.5 million paid from non-secured credit by the newly
established company Exclusive Web Design with BGN 3 of subscribed capital?

We consider that in this case the rules, which seem to be introduced at the initiative of the auditing
companies, have been created as a special order to the CCB case and the main motif for the
implementation of illegal approaches and solutions is determined by future benefits and represent
a downright corruption scheme. We are going to prove this statement below.

The indication about relationship belongs to this group of factors leading to the deterioration of the
financial status of the borrowers from Group 2. Such conclusion could be made only after a thorough
analysis, which requires time, which the consultants did not have during the ten days of their
engagement. Besides this, the proven relationship is an administrative violation and the actions for
its punishment or reducing the share of such credits as a ratio to the equity of the bank are
regulated by BNB rather than by the Prosecution Office, and are not a subject of penal

Thus, the report of the supervisory inspection of BNB, carried out at CCB from 04.07.2014 to
14.10.2014 in parallel to the work of the consulting companies, on the basis of EU Regulation 575/2013
in force as of 01.01.2014 according to whose requirements the banks should report to BNB any big
exposure, bigger or equal to 10% of the acceptable capital of the institution, of a person or a group of
related persons reads as follows:

As at the analysed periods (31.12.2013 and 30.06.2014) no exposures exceeding the maximum
admissible threshold for a big exposure of 25% compared to the equity of the bank were established
(page 14).

As a result of the check, the inspection confirms that the following borrowers: Port Invest Rousse AD,
related to Bulgarian Wine and Spirits AD in respect to the control of Aflik Bulgaria EAD, Rodina
Properties related to CD Developments in respect to the common owner TTs-IME AD, TC Invest and
Hydro Power Projects EOOD are reported to BNB as big exposures exceeding 10% of the CCB capital.

The observance of the restrictions under Article 45 of the Credit Institutions Act concerning exposures to
bank administrators, shareholders owing shares with more than 10% of the total number of votes in the
general meeting of the institution and other kinds of exposures was also checked and the inspection did
not find any violations in the data reported by CTB bank as at 31.12.2013.

The opinion requested by the inspectors of the Bank Supervision Directorate of the Banking Supervision
Department in connection with the established different groups of related persons on the grounds of the
different criteria and claims for high risk of concentration of the credit portfolio reads that the formed
exposures do no fall directly in the range of the regulations under Article 45 of the Credit Institutions
Act, due to which the latter are not reported in the supervisory reports under Article 45 (page 15).

The enforced by the statement of the Chief Prosecutor conclusions for lost BGN 3.5 billion (67 %
of the assets of the bank) by the patrimony of CCB in companiessafety-fuses and for impairement
of up to 92% of its assets are completely based, without referring to their many reserves, on the
proposals made by the consultants in respect to the other two groups of credits: group 3 credits,
for which significant information is missing, and group 4 borrowers for which there is information by
the then (2014) date of starting insolvency procedures. It does not become clear from the reports and the
further development of the abrupt liquidation of CCB exactly what information it concerned. A similar
position makes pointless the meaning of the accusation in a normal state as upon the absence of a
categorical opinion of narrow specialists in this matter, not a single lawyer could justify a reasonable
doubt regarding performed crime.

The report of the consultants transferred on July 09, 2014, where the contractor pursuant to a decision of
BNB, Deloitte OOD, was replaced later by the consulting company Deloitte Bulgaria EOOD, says that
the amount of the credits of groups 3 and 4 stands at about BGN 1.4 billion for each consulting
company, the amounts varying slightly with the various consultants:

Excerpt In % of
Credits Credit Group 3 Group 4
Mln. BGN Portfolio Mln. BGN Mln. BGN
Deliotte Bulgaria 1913 35 % 468 995
Ernst and Young 1405 22 % 1121 22
AFA 1855 35 % 1062 342

Total: 5173 Total in both groups for the three companies:

BGN 4.010 billion

The mechanical sum of the credits submitted for check by the three checking companies does not
provide the exact amount of the credits of both groups, because in their lists of companies-borrowers, the
biggest borrowers are included at least in two of the three lists to study. Thus Deloitte Bulgaria studied
50, Ernst and Young 55, AFA 43 borrowers, a total of 148 borrowers. The comparison with data
from the statements of Ivan Iskrov and Sotir Tsatsarov showed, however, that practically the
cumulative result of the above credits was pointed out to the participants of the consultative
meeting as a practically total loss, or a capital gap, or a pit.

Are documents of the files missing or vanished?

Another shocking element is related to the character of the so-called missing documents in the credit
files: this category includes borrowers, for which significant financial information is missing regarding
the financial status and/or the target absorption of the credit, due to which it is impossible, within the
frames of the performed procedures, to make a conclusion regarding the possibility of the borrower to
service the respective obligations to the Bank, the three consulting companies report.

In his statement regarding the claims for the disappearance of these documents because of their seizure
by the Prosecution Office, Chief Prosecutor Sotir Tsatsarov said that the Prosecution Office did not take
any original documents but copies after strict coordination with the representatives of BNB and the
consultants, hired by BNB. This claim could be classified as a lie, as the seizure of these documents was
performed and widely covered by all television channels between June 14 and June 16, 2014 (the decree
for search and seizure of credit files of the Sofia District Court was dated June 13, 2014), the
conservators were appointed on June 20, 2014, and the consultants on June 26, 2014. There is no way to
have any agreement and only copies of these documents to be received under the condition that by the
moment of their seizure there were neither conservators nor representatives of the consultants in the
bank. The ostentatious operations with the raid in CCB and the taking out of boxes of documents were
shown almost live by the Prosecution Office on a number of television channels. After that, the Chief
Prosecutor stated that the reason for them to invade the bank was a mistake of the Prosecution Office
and apologized for the arrest of a few persons alleged as perpetrators of the murder of the oligarch and
MRF MP Delyan Peevski. In a statement of his, the Chief Prosecutor stated explicitly that there were
never any commissioning and preparation of any actions against oligarch Peevski.

It is indicative that the cited report of the supervisory inspection of BNB shows that, for example, the
financial statements of many companies for the first quarter and the six months of 2014 are missing.
Please note, that these statements were handed over by the conservators as at September 24-25 For
your information, all checked borrowers have submitted officially certified balance sheets and profit and
loss accounts of their companies for 2013. They say that balance sheets as at 31.03.2014 and as at
30.06.2014 were missing, which is absurd, because if the credit inspectors have wanted them, most
probably they would have been provided, however this depends on their personal judgement. Second,
these draft balances are not a document and do not guarantee the trustworthiness of the information.
Only the annual balance sheets and profit and loss accounts submitted to the National Registry Agency

and the National Revenue Agency jointly with the whole set of the remaining required breakdowns and
documents are of such quality. Third, the draft balance sheet for the first quarter, for example, is made
usually in May of the appropriate year, and for the second quarter in July or August.

The most essential issue is whether it is true that CCB has extended on a large scale credits without
collaterals and/or the documents of the pledged collaterals are missing.

In this connection we compared the information about the amount and kind of collaterals with CCB as at
31.12.2013, used also in the KPMG audit for 2013, as well as at 31.05.2014 and compared them with the
conclusions from the analysis of the supervisory inspection of CCB working on data and documents with
final date of 30.06.2014.


As at 31.5.2014
(Sum of Total)
Kind of collateral Total in BGN %
Other financial assets 2 000 000 0.02
Pledge on shares 720 790 069 7.20
Pledge on blocked cash 25 458 006 0.25
Pledge on fixed tangible assets 293 379 458 2.93
Pledge on short-term tangible assets 560 326 899 5.60
Pledge on receivables and future incomes 6 435 146 308 64.27
Mortgage on real estate 835 094 066 8.34
Registered pledge on commercial enterprise 474 176 736 4.74
Warrant by third parties 553 832 227 5.53
Right to insurance compensation 112 361 370 1.12
Grand Total 10 012 565 139 100.00

As at 31.12.2013
Sum of Sum of
Row Labels Total %
Pledge on shares 811 005 240 146.44
Pledge on blocked cash 115 501 779 20.86
Pledge on fixed tangible assets 267 023 239 48.21
Pledge on short-term tangible assets 380 077 357 68.63
Pledge on receivables and future incomes 5 856 848 438 1,057.51
Mortgage on real estate 978 633 737 176.70
Registered pledge on commercial enterprise 573 082 506 103.48
Warrant by third parties 602 127 297 108.72
Right to insurance compensation 13 824 697 2.50
Grand Total 9 598 124 290 1,733.04

The information is from accounting records in the system of the bank and it
is included in the official audit of KPMG for 2013

On the basis of the copies of documents provided to the inspection, the inspectors established the
following different types of collaterals pledged in favour of the bank, by exposures, representing 64.96%
of the excerpt of a little bit of over BGN 3.7 billion:

Secured by a pledge of securities (real pledge with transferring the temporary certificates to
the bank or a pledge pursuant to the Registered Pledge Act of shares of the capital of the
companies) credits for BGN 338,337,034, or 9.12 % of the excerpt;
Secured by a pledge of receivables under the settlement accounts, settled under the
Registered Pledge Act BGN 427,504,242 or 11.52 % of the excerpt;
Secured by a registered pledge on commercial receivables under the Registered Pledge Act
BGN 359,552,111 = 9.69 %;
Secured by a conventional or marine mortgage and/or registered pledge on machines,
equipment, commercial enterprises, goods in turnover, etc. pledged under the Registered
Pledge Act BGN 270,869,638 = 7.30 %;
Secured by more than one kind of collateral BGN 1,013,871,275 = 27,33 %;
For exposures, representing 35.04 % of an amount of BGN 1,300,272,629 from the credit
excerpt, no documents in the credit files were found (page 6).

Our study shows that the borrowers with a collateral in favour of the bank on future receivables include
first all military industry enterprises Arkus AD, Avionams AD, Dunarit AD, Kintex, VMZ Sopot, etc.
The specifics regarding these companies is that they cannot operate with any other bank besides the one
which is licensed for such type of payments. The bank provides to the military-industrial complex
turnover funds, pre-export financing, gives a guarantee for good performance to buyers under the form
of a performance bond. It risks to lose the preliminary paid 5 - 10 % of the value of the respective
transaction in case of bad performance or non-performance of the respective contract. The funds from
the export of special products could be received only in CCB, only in the account of the enterprise
contractor, and the last issue to be settled is when and how the performance bond is returned/deducted
after the respective court case or possible court or arbitrary decision incase of non-accomplishment of
the contract. So, there hardly exists more serious pledge than the pointed out one. However, this did not
prevent the team of consultants and conservators to apply for this asset an impairment equal to 100 %,
i.e. the value of the credits for these enterprises, including the leading Dunarit AD, evaluated at 0, brings
down the evaluation of the enterprises themselves in their capacity of commercial enterprises to 0.

The collaterals include a specific feature as well warranty of third parties. At the end of 2013, the total
amount of the warranties stood at BGN 602,127,297, and on 31.05.2014 BGN 553,832,227. The
warranty documents of this type have a term, i.e. they have a deadline of presentation. Not a single
document of this kind was presented for payment to the warrantors, nor the conservators have
undertaken the required activities for signing of new avails, promissory notes, warranties during the
period of the registered pledge. The requests for information sent by them and accompanied by a special
requirement that the borrowers/debtors give their consent the conservators to dispose of their collaterals
unconditionally made the borrowers even more afraid and pushed them to search other solutions, most of
them corruption ones.

The above, and not only, amounts are completely lost by the present moment at the expense of the public
funds paid by the Bulgarian Deposit Insurance Fund and the lost amounts of the depositors, which were
above the guaranteed amounts.

Moreover, the actions undertaken during the first days of the special supervision and related to declaring
dozens of companies, mainly companies - special purpose vehicles, for which 100 % of the shares of the
companies funded through them, released the collaterals of debtors to companys creditors. We could
hardly speak about lack of knowledge or lack of attention on behalf of the conservators, although their
appointment was illegal, due to the fact that they did not have the required qualifications to perform this
activity. They were rather executors of imposed by interested persons deliberate decisions that had led
to the situation, where the companies, which have become completely independent credited by SPV,
to become an easy prey for embezzlement together with their assets.

Regarding the third category of borrowers, leading factors in the study were the dates of registration of
companies, i.e. the fact that they were established within the frames of 12 months before extending the
credits; renegotiation of credits, i.e. companies with renegotiated credits; companies, for which
documents were missing to certify absorption of credit according to the purpose as described in the
credit contract. The group includes companies, whose credit files do not contain financial statements for
2013 and/or detailed analysis of their financial status including the expected cash flows and the sources
of repayment of the credit. We have expressed considerations regarding some aspects on these issues

The companies with missing documents for valid pledged collaterals and/or external evaluation of
collaterals and/or other analysis of their value form a special subgroup. It should be mentioned here that
the absence of a collateral of a credit is not a crime pursuant to the Bulgarian bank regulations. The
thing, which is important only, is the way the bank controls the cash flows of its customers.

The subgroup includes also the companies for which no operational activity corresponding to the amount
of the credits received could be identified, and the assets of the companies include mainly the loans
extended to third parties and receivables and investments in other companies.

Naturally! They have been established just for that!!

And they are established as new companies!! This apparently concerns special purpose vehicles, which
besides funding through extended credit for investment project(s) and monitoring the observation of the
conditions for absorption, securing and servicing of credits have no other activity. Considering both
global and world practice, they do not have numerous staff, either. The specific thing in this case, in the
context of shortages registered by the consultants or their updating, is that as investors, the special
purpose vehicles hold all pledged collaterals against the credits provided by them, regardless of the fact
whether this concerns investments in going concern or green-field investment used by a new company.
And regardless of the fact whether these collaterals were pledged in favour of SPV or CCB.

The scandalous thing in this case, as we have already discussed, is that the shares of the special purpose
vehicles were pledged in the bank, however, due to the understanding typical for the bank activity from
the 19th to the beginning of the 20th century that if the collateral is not a real estate, a material thing,
which you can touch, cash into account or gold, the Bulgarian auditors with consulting engagement,
however, it is true that not all of them are like that, accept them, or rather suppose that they are not
available or are equal to zero.

The zeroing (impairment = 100 %) was performed by the extraordinary professionals - the bankers
of the Central Bank Ivan Iskrov, Dimiter Kostov and Neli Kordovska and was finalized and announced
in fact in the exclusive summary of the financial results from the study (for 10 days!!!), which we
traced in the speech of the Chief Prosecutor before politicians and President on 14.07.2017. Not by the
ones who regulate and who are responsible for observation of the Bulgarian Banks Act in interest of the
preservation of the money of the depositors! If they could, and due to the pointed out as irregular or
scandalous: term of registration of the special purpose vehicles of under 12 months before the extension
of credits; the small number of appointed staff (usually a director, an accountant, a secretary); the lack of
data regarding the operational activity, corresponding to the amount of the provided credits, the basic
implementers of the order to send CCB in bankruptcy, the participants in the cited meeting (the super
professional bankers of the Central Bank) would have doubled this zero.

An overview of the international practices would show that a number of companies in the West
European countries, the USA, the offshore zones funding investment companies with relatively higher
risk (and this is just the role of the special purpose vehicles) are managed by 2 to 5 persons, including a

technical secretary. The mistaking them with holding companies structures that also manage
investment projects in subsidiaries and other companies is also apparent, however the holding
companies structures issue consolidated balance sheets that in respect to revenues/costs and other
financial indicators correspond to the amount of the projects funded by them ... In Bulgaria, as in any
other country, special purpose vehicles are used. Both in 2014 and now, each Bulgarian bank, without
exception, worked with such structures, however in CCB only they are safety fuses, hollow rings in
a pyramid!!!

It is completely normal for the special purpose vehicles to carry out activity of monitoring and control
over the projects only, for whose funding they have extended a loan. Most of these companies in CCB
prepare an individual balance sheet and due to this, their operational activity is subjected to the
management through property or capital of the investment projects in third companies. The picture is
more different for companies, where the funded subject is the special purpose vehicle rather than the
centre the parent company, such as the case with Dunarit AD is. Such kind of companies prepare a
consolidated financial balance sheet, where the volume of the operational activity is a sum of the results
of all companies included in the structure.

In developed countries with contemporary banking there is a number of ways to fund new, riskier,
innovation projects through different venture capital funds (funds for risk financing), investment funds,
through the attraction of funds from placing of newly issued shares or bonds on the stock exchanges.
Just in Bulgaria, the whole economy business, agriculture, tourism, our personal life, depends on the
good will of banks. The corruption fee for receiving credits 10% - is a public secret, no matter whether
the banks are private or state-owned. And whether their owners know about that! We service the banks
rather than they service us and our business! In this context, the attempt of CCB to break through this
wall and develop a tendency of investment funding was apparently punished. The status-quo has its say.


What were, however, the proposed with many conventions, insecurity, absence of guarantee and refusal
to take over responsibility impairments of assets of CCB in the reports of the notorious three auditing
companies as at July 9, 2014?

Deloitte Bulgaria EOOD points out the following approximate impairment percentages and need of
minimum provisions as at the date of conducting the overview of the credits assigned to them:

Average impairment percent used Minimum provisions in thousands of BGN

Variant 1 Variant 2 Variant 1 Variant 2

Category 1 0,55 % 0,61 % 1,488 1,650

Category 2 13,86 % 20,39 % 45,103 66,352
Category 3 n. a. n. a. n. a. n. a.
Category 4 47,64 % 53,26 % - -
Total amount: 46,591 68,002

Due to insufficient information, the consultants point out at least that they cannot find and would not
find, even with forecast purposes, to specify suitable percentages, which should be used for quantitative
measurement of the minimum amount of provisions for the exposures in certain categories.

Besides this, they note that the concentration of 92% of the credit portfolio of 137 borrowers represent a
significant concentration of the credit risk in a small number of borrowers.

Ernst and Young EOOD points out for the classified groups of the borrowers pointed out to them the
following percentages of impairment and minimum provisions:

Average impairment percent used Minimum provisions in thousands of BGN

Variant 1 Variant 2 Variant 1 Variant 2

Category 1 0,55 % 0,61 % 95 105

Category 2 13,86 % 20,39 % 96,159 141,163
Category 3 n.a. n.a. n.a. n.a.
Category 4 47,64 % 53,26 % 10,762 12,031
Total amount: 201,921 258,194

AFA OOD specifies the following parameters of the impairments and the minimum provisions for the
credits studied by them:

Average impairment percent used Minimum provisions in thousands of BGN

Variant 1 Variant 2 Variant 1 Variant 2

Category 1 0,55 % 0,61 % - -

Category 2 13,86 % 20,39 % 47,450 69,806
Category 3 n.a. n.a. n.a. n.a.
Category 4 47,64 % 53,26 % - -
Total amount: 47,450 69,806

The analysis of these data, as well as the approach and the means of expression used in the consulting
reports dated 09.07.2014 lead to some very significant conclusions: the absolutely photographic
precision of the conclusions of the three companies, the evaluations pointed out above, the warnings that
follow show that:

- First, the valuations made in one and the same way of the parameters of impairment and
minimum collateral are coordinated by and/or ordered by BNB. Despite this, the consultants in
question were not brave enough or have shown certain professional consciousness by refusing
to determine a percent of impairment of insufficiently studied credits and credit files or to
impair a certain asset to 100% because the borrower had not submitted on time a copy of their
financial statement for the first quarter of 2014.

However, the deliberate omission of all three companies to comment the lack of overdue
credits by the date of their check of data as at 31.05.2014 is either strange or engineered. This
is an extremely important circumstance for the classification of a financial asset as an impaired
one. The absence of a problem in the servicing of a credit is completely sufficient condition that

it is discussed as a regular exposure. This matter was developed wonderfully in the International
Accounting Standard (IAS) 39.

- Second, apparently, it was not necessary to hire three companies, to which the landmarks and
borders regarding the impairment of assets were advised in advance.

- Third, considering the pointed out approach of BNB to conclude contracts for obtaining
financial information which they possess in principle and which they received every day, for
which reports of the Banking Supervision Department testify, it seems to be biased not to
require valuation of the collaterals, or to obtain additional information what assets were pledged
as collaterals to the special purpose vehicles that, on their behalf, had pledged 100% of their
shares to CCB.

Official Announcements and Decisions of BNB Preceding the Consultative Meeting of Party
Leaders with President R. Plevneliev on 14.07.2017

We take the liberty to show again a part of these decisions presented to the society through news releases
of BNB at least because the public expectations were related to the protection of these positions by BNB
before representatives of the executive and legislative powers:

NEWS RELEASE July 11, 2014

Statement of the Management Board of BNB

After numerous media publications and the odd, in our view, press conference given by the then
Corporate Commercial Bank AD management, on 18, 19 and 20 June nearly BGN 1 billion was
withdrawn from the bank.


In summary, the auditors review came to the following conclusions:

1. The results of the review of Crdit Agricole Bulgaria EAD are positive. This is a well managed
bank with good banking practices. Its loan portfolio quality is very good and sufficiently covered
with collateral and adequately provisioned.
2. The results of the audit of Corporate Commercial Bank AD show actions which are inconsistent
with the law and the good banking practices, to put it mildly. Significant parts of credit files for
a loan portfolio of BGN 3.5 billion, out of the total BGN 5.4 billion loan portfolio, are missing,
most probably destroyed during the days before the conservatorship was placed. A considerable
part of that credit portfolio suggests a very large connectedness between debtors and the
majority shareholder of the bank, Mr. Tsvetan Vassilev.

As a result of the insufficient available information, the auditors expressed the opinion that it is difficult
for them to assess the financial position of the debtors and their capabilities to service their loans. It is
also difficult to assess the availability and quality of the items of collateral, and therefore it is impossible
for the auditors to make a final conclusion about the quality of the loan portfolio of BGN 3.5 billion.

For all the above reasons, today we are going to present the auditors report on the review of Corporate
Commercial Bank AD assets and liabilities to the attention of the Prosecutor General of the Republic of


Henceforth, we will leave the issues set out above to the Prosecutors Office to have their say, so as not
to obstruct the judicial investigation. From now on, the Bulgarian National Bank jointly with the
Government will focus on the restructuring and recovery of the good part of Corporate Commercial
Bank AD with the aim to safeguard the interest of all its depositors.

The license of KTB will be revoked and insolvency proceedings will be started against it. The State,
through the Ministry of Finance, and the Deposit Insurance Fund will be privileged creditors in the

Restructuring and recovering of this credit institution is very important for key sectors of the economy
and for sizable Bulgarian municipalities, hospitals, many companies and thousands of citizens alike. Any
other decision would be irresponsible and would entail adverse social, economic and political
implications in the long run.

We reiterate, we are working to open on 21 July the recovered state bank.

Once again we underline, now its the politicians turn!

NEWS RELEASE of BNB Dated July 15, 2014

Following the consensus reached at yesterdays meeting with the President of the Republic of Bulgaria,
attended by representatives of the major parliamentary political powers, the Government and the BNB,
the Bulgarian National Bank has undertaken actions in the following two directions:

Given no agreement exists on the legislative approach proposed by the Central Bank and the
Government, which was discussed beforehand with experts of the main political parties represented in
Parliament, for finding a solution to the problems in the KTB banking group and with regard to the
companies and citizens with deposits of above 196 thousand lev, the Bulgarian National Bank is
continuing work under the special supervision procedure. Under the currently effective legal framework
(art. 115, para.3 of the Law on Credit Institutions), the maximum term of conservatorship is 6 months;
however, in this particular case, the BNB has imposed a 3-month term.

In the continuing political consultations for finding a consensus on a complete solution of the KTB case
for safeguarding the interest of KTB depositors with deposits exceeding 196 thousand lev, and upon
reaching such a consensus, the Central Bank is ready to provide its full expertise in carrying such
solution out.

The stated decisions and the position of BNB on the CCB case of 09.07.2014, of 11.07.2014 and of
15.07.2014, i. e. after the Consultative Meeting with the President, are an indicator of the dependence of
the independent regulator BNB, of the nature of a commission of the actions undertaken by it in
regards to CCB, about the hypocrisy and lies, which are the basic instruments of the state institutions for
the manipulation of society. Why the reports of the consultants were transferred to the Prosecution
Office? The hypotheses in them are presented and protected by stipulations and of a higher degree of
insecurity, and the warning regarding the confidentiality concerns also the Prosecution Office rather than
only us as third persons. The reports cannot be used for court purposes and disputes.

The CTB Case in Transcript No. 2 Methodology of Making (Imposing) of Preliminary
Developed Engineered Decisions. Persons Commissioning Them and Implementers.

On the grounds of the short overview of the main conclusions in the reports of the three consulting
companies for the status of the specific assets of CCB as at 31.05.2014, a number of questions remain

Where is the Audit?

According to what criteria, logic and professionalism, has the Chief Prosecutor of the Republic of
Bulgaria decided to use without any additional check, expert opinion, AUDIT, preliminary insecure,
non-confirmed and quite purposefully developed hypotheses regarding the status of assets and liabilities
of CCB which according to the agreements with the companies contractors of the BNB commission
cannot be used by third parties except the conservators and BNB? If he has used the summaries of the
above-pointed reports as a basis, they explicitly underlined that they do not express any assurance in the
truth of their original findings. That means that the leaders of the state with the Chief Prosecutor in the
lead have made a decision on the grounds of SOMETHING WHICH IS GOOD FOR NOTHING.

Have the results of the supervisory inspection at CCB, started on 04.07.2014 been used? The first
two stages of the check ended on 07.07.2014 and 14.07.2014, respectively, and the results from them
were submitted on a daily basis to Iskrov & Co and were published in a preliminary report as well. From
quite a lot of parts from the statement of the Governor of the Central Bank it becomes clear that he and
his colleagues are well acquainted with these results. Maybe because of that Iskrov does not state
anything for sure.

It is important to mention that the statements of Ivan Iskrov do not contain any confirmation and surety
regarding the claims for lost BGN 3.5 billion. Unlike him, Sotir Tsatsarov says that significant
documents are missing or that there is no trustworthy information for BGN 3.5 billion; that these BGN
3.5 billion (BGN 3.486 billion, more precisely) represent 67.2% of the credits for which there is no
information, the companies are newly established, without operating business, with unclear sources for
their repayment, that there is no compliance between goal and amount of credit.

The exact amount of BGN 3.486 billion, pointed out by Sotir Tsatrsarov as assets with complete
impairment represent 87 % of the assets, included in the third and fourth category of the credits studied
by the consultants. Nobody discusses the issue and gives any explanations what were the criteria for the
submission of these credits and borrowers in preliminary prepared lists to each contract of the three
consulting companies. If we go into detail regarding the activity of the borrowers, it becomes clear that
these are companies that have received investment credits behind which there are real enterprises, lands
and landplots, buildings and productions, hotels and telecommunication facilities, etc.

And still the issue on the basis of what documents and conclusions, or maybe intuition, BNB submits the
report of the conservators based, but not only, on the consulting reports in the Prosecution Office, which
fixes the amount of the gap to BGN 3.5 billion remains open.

Just these companies as a package of credits of a total amount of BGN 3.710 billion, i.e. without the
borrowers doubled with the consultants, have been submitted for check of the supervisory inspection of
BNB. Under other circumstances and if the audit was official pursuant to IAS 39, we would have
congratulated BNB for the doubled check, however the case is not like that

The results from the detailed inspection of the Bank Supervision in report No. 125089 dated 27.10.2014,
remain unchanged in their part about stage one and stage two as at the date of submission of the report as
well. The most characteristic thing from them is:

the absence of any conclusions about violations regarding the required impairment of
assets, however, it is stated that the credits are serviced regularly.
the absence of any serious findings about violations regarding relationship.

There followed some excerpts from this report:

"As at 30.06.2014, the credit portfolio of the bank is formed mainly by regularly serviced credit
exposures, with minimum share of the outstanding obligations, compared to the overall carrying amount
before impairment. (Page 6)

In the course of inspection, an excerpt of credits (BGN 3,710,407,000), representing 67 % of the credit
portfolio (BGN 5,549,240,000), with the following features (for clarification: the inspection was given
the task to study the same assets as the consulting companies)

1. A significant share of the excerpt is formed by credits provided with investment goal, for
purchase of shares/stakes from the capital of third parties.

2. Due to the existence of a predominating share of investment financing on behalf of the bank,
a significant part of the payments due under a principal are still in a grant period (46.58 %).
/Let us remind: the BNB supervisory inspection as the consultants made a review on credits
landed after March 31-st 2013/. Regardless of this, repaid before term obligations on
principals amounting to BGN 76,480,000 were established. Another factor that might render
influence over the expected repayments and the quality of the credit portfolio are the
annexes for renegotiation of the repayment plans on principals of part of the credit
transactions (28.86%) concluded in June 2014. Monthly servicing of the interest payment
was negotiated and performed for all transactions. (page 6). That is, 75.44 % of the same
excerpt of assets submitted to the consultants auditors cannot be provided or
impaired, first, because the companies have repaid regularly the first ones - their
interests, the second ones interests and principals. We do not know the deadlines of the
grant periods for each of this credits, however, if most of the credits were provided in 2013
as the reports of the consultants say, and the grant period for the investment credits is of an
average of 3 years, apparently the grant period under the contract was still in force for 46,58
% of the studied excerpt, i.e. for assets of the amount of BGN 1.7725 billion. On the other
hand, the renegotiation in June through annexes of the repayment plans with three-month
delay of the payment of the repayment instalment for 28.86 % of the credits for a period of
three months was performed most probably in the interest of CCB considering the behaviour
of borrowers in the analogical situations of 1996-1997 and the expectations CCB to be
reopened after a three-month regime of special supervision.

3. The check of the supervisory inspection on the status of the credit portfolio as at 30.06.2014
shows the following data, which the inspectors did not change as at the date of submission
of the report as well:

Carrying amount of assets BGN 5,549,240,119

Regular principal - BGN 5,453,767,026
Outstanding principal BGN 62,525,283 = 1.13 %
Outstanding interest BGN 33,450,048 = 0.61 %

A summarized conclusion: As at 30.06.2014, the credit portfolio of the bank is

formed mainly by the regular serviced credit exposures upon minimal share of

outstanding obligations, compared to the total carrying amount before

The banking inspectors make also a warning note based on the empirical experience from analogical
situations in banks in various countries: Bearing in mind the status of CCB after 20.06.2014 and its
placement under special supervision as well as the ensuing from these restrictions in the activity of the
institution, expected are changes in the future behaviour of borrowers regarding their strict observations
of the agreements with the bank. Almost all credits were serviced according to the agreed repayment
plans. In the case of the regularly serviced so far credits, the first delayed instalments for a principal and
for an interest were as at the end of June 2014. In June 2014, annexes were concluded for part of the
credits aiming at postponing the payments of repayment instalments, predominantly for a period of three
months(total carrying amount of BGN 1,067,294,000 or 29 % of the excerpt.

Why Iskrov and Co did not set a foot on this information coming from their own sources as the
inspectors on Banking Supervision were. Most probably because there was no way to make a deal
with them. And they had to fulfil the order to liquidate CCB! More than 22 inspectors participated in
that inspection. There was no other such case in the supervisory practice of BNB. The conclusions of
the inspection are for the status of the credit exposures as at 30.06.2014, i.e. as a date one month later
than the date on which the data of the consulting companies were intercepted 31.05.2014.

Besides everything else, the inspectors, according to their explanations, including before our members of
BNB, had seen disassembled credit files, documents that were taken around the whole bank. There were
also prosecutors and investigators in the headquarters of CCB. The society and the media are aware that
senior officials of other banks, competitors of CCB, were also attracted by the conservators to help
(against a high remuneration, indeed), however this did not change the fact of breaking the Competition
Protection Act. We quote: ...During the initial stage, the members of the committee were assigned to
establish the completeness of the credit files that were subject to review during the last supervisory
inspection (31.03.2013). This stage took place from 04.07.2014 to 07.07.2014. The credit files were
submitted to the supervisory inspection by Deloitte Audit OOD, Afa OOD and Ernst and Young
OOD without any list of the documents included in them.

The documents contained in these files were copies in their major part. Due to the short terms for
performing the inspection, due to the constant assignment of new tasks, as well as due to the stressed
situation in the bank (work at one and the same place of many teams from different institutions), no
comparison was made with the original credit files. It was also not possible to conduct a sufficient
number of meetings and discussions with the credit inspectors, as well as to obtain explanations about
the current administration of the credit transactions and establishing the actual status of the accepted
collaterals. An additional difficulty in the collection of the information was the fact that persons
responsible for the credit process were laid off due to their participation in investigation proceedings
(Page 12) Until the conclusion of the inspection on-site, the conservators did not provide the currently
required by the inspection documentation missing from the copies of the credit files submitted for the
check. This is essential for the formation of supervisory opinion regarding the credit risk undertaken by
the bank, its reduction and the potential of the borrowers to service their obligations to the institution
data about the appropriate pledging regarding the credit transactions in favour of the bank, current
financial statements, as well as their encodings. Part of the requested information is provided by the
conservators on September 24-25, 2014. In the course of the overall inspection, documents and credit
files were received only from assistants of the conservators, employees of the bank. The inspection was
provided only passive access to the accounting system of the bank for tracing the cash flows in the banks
of the borrowers from the reviewed excerpt and of other clients of the bank, whose overall number totals
over 1,000.

Enough for the missing documents! Missing or taken out deliberately from the credit files aiming at their
absence to be established by the auditors, so that they would be classified in the group of assets for

All this situation of well organized chaos where credit files are disassembled, documents disappear
deliberately or accidentally from files which were complete a few days ago, looks at least cynical and
even perverse at the background of the lost destinies of thousands of depositors in CCB. And of the
disregard of the Bulgarian authorities to a great number of their own citizens who had been ignored for
more than three years so far.

At the background of the published announcements of BNB regarding the decisions of the Governing
Board of BNB, at the background of the results from the check of the supervisory inspection of BNB at
CCB, at the meeting of the leaders of political parties represented in the Parliament with the President on
14.07.2014, Ivan Iskrov does not claim anything besides insecurity about the status of CCB, he even
expressed desire the whole portfolio to work well. And it has been working well. He even overlooks
the proposed conditionallity in the reports of the consulting companies conclusions and proposals for
possible impairment in the case of the worst scenario for CCB (Ernst & Young has the highest forecast
regarding the need of minimum provisions of BGN 248 million and of clarifying the status of the other
assets). He did not mention also the need of an official audit of CCB by 20.06.2014. There is no audit.
And nobody from the persons interested in the bankruptcy of CCB does not want to have an
audited balance of the bank. In order to restrain the public dissatisfaction and to justify the non-
performance of the recommendations of the European Commission not to liquidate a big systemic bank,
the deceitful information about 10-day and after that 3-month audit is submitted to the respective

It is not important whether the average citizen or politician from Europe, Bulgarian or not, knows the
difference between inspection and audit, however, narrow specialists economists and lawyers, such as
Ivan Iskrov, Dimiter Kostov, Yordan Tsonev, Menda Stoyanova, Dessislava Atanassova have insistently
been hammering it home in peoples heads that the liquidation of CCB bank was performed legally after
an audit performed by auditing companies, which is an outrage. And it has been going on for more than
three years. And it has its grounds, as the lack of audit is de facto one of the instruments of
corruption absorption of the assets of then bankrupted bank.

Just because of the this drastic discrepancy between truth and the justifications for the withdrawal
of the license of CCB and the forced liquidation of the bank accompanied by vandal robbery of its
assets and depositors, NGO Nie, Grazhdanite (We, the Citizens) declares again categorically that
we will also seek answers of the following questions, which should be given to us by the
Government, the Chief Prosecutors Office and the Supreme Administrative Court, from all
possible institutions and international organizations, of which our country is a member:

1. When and after what logics, laws and conscience did President Rossen Plevneliev, the leaders of
the political parties represented in Parliament and their experts, present at the meeting of
14.07.2014, decide that the problem of CCB IS RELATED TO ITS CAPITAL RATHER
THAN TO ITS LIQUIDITY? Let us remind you that in the case of the studied excerpt of
over BGN 3.710 billion of credits, (67 % of all credits) of a gross carrying amount of the
credits of BGN 5.549 billion, i.e. sufficiently representative in order to make a conclusion
regarding all exposures, 35.04% of a value of BGN 1,300 billion were missing documents in
their credit files regarding the collaterals pledged by them in favour of CCB. This concerns
missing documents that might have been destroyed or hidden deliberately. However, even if we
suppose that 35 % of the credits were not regular and shouldhave been be impaired and
provided for and that in case that they did not have an active grant period under a
contract, arrears for four months (from July to October) according to the matrix and upon

possible discounting of the collaterals, if any, should not have exceeded 50 %, i. e. BGN 650
million. In fact, the extended to 138 days regime of special supervision was quite necessary so
that the biggest possible, both number of and amount of credits, to become irregular and the
long-time repeated lie to society that this is a pyramid to acquire relatively acceptable
(explainable) outlines.

2. We have explained above our arguments regarding the vagueness in categorization of the groups
of assets of CCB. The mere conclusions of the consulting companies and the limitations in
respect to using the information do not provide any evidence about a problem with the capital.
Apparently, the statement of the Chief Prosecutor, where the unreliable data and
conclusions, as well as the doubts, turn into evidence with future material probative effect
and power and make official to a great extent through the present representatives of the
executive and legislative authorities the preliminary decision made by the ring of the
organizers and beneficiaries from the rampage of CCB the worst and attackable decision
for liquidation of CCB. What the purpose of the Chief Prosecutor was, had he executed any
order is a question to other competent authorities, however, the future studies which dozens of
depositors, our organization, shareholders have initiated in different countries will point out the
beneficiaries of the bankruptcy of the bank, the plunder of its assets and the doubled robbery of
tens of thousands of citizens and companies. And not only Bulgarian ones.

3. Whose interests were the acting as an organized criminal group bankers from the Central Bank
Ivan Iskrov, Dimiter Kostov, Kalin Hristov, Neli Kordovska and the whole Governing Council
of BNB protecting by submitting the preliminary, unreliable, imprecise, impossible to apply
upon request for declaring insolvency and subsequent liquidation, without making a REAL
AUDIT of the bank, information of the reports of the consulting companies to the Chief
Prosecutor claiming that it is real, confirmed and not subject of any doubts? Because this had
happened most probably before the meeting of 14.07.2014 and the news releases of BNB of July
9 and 11 give indications about that. Why the results of the explicitly conducted supervisory
inspection of CCB were not discussed at the meeting with Plevneliev?

4. Why have Iskrov and company allowed the PRESTIGE AND REPUTATION OF BNB TO
BE INJURED after its 135-year of history and traditions as state regulator by placing the
inspectors in the unenviable role to ask and depend on conservators, external consultants,
investigators for receiving documents in order to perform their official obligations? Why did
they accept in this indecent way and most probably ordered explicitly (as the conservators would
never have made such a decision by themselves) the inspectors from the Banking Supervision
Department sent to CCB to be blocked to apply the practices assigned to them pursuant to
ordinances of BNB and the international regulations?

5. Why did they circulate the apparent lie about disappeared documents and why did they allow the
most honest employees to BNB to be turned into accused? After Tsvetan Gounev, Slavyana
Danailova, a year after her participation in the management of the supervisory inspection, also
became accused. Probably because she did not yield to the enormous pressure to change the
conclusions of the report signed by her for the first stage of the inspection.

6. On the basis of what document, analysis, report for two days, did the very same bankers and
politicians decided that the problem of the First Investment Bank (FIB) is related only to its
liquidity and provided state help to them? Was it in favour of FIB that after the central bankers
said at the first meeting of politicians with the President that BNB is ready to touch a bit
Ordinance No. 6 of BNB regulating the funding of banks from the Central Bank regarding the
rules and collaterals for extending state assistance, a day after that, on June 30, 2014, the
Governing Council of BNB voted such amendments, without any public discussion, which to

come into force retroactively as of 01.07.2014, independently of the fact that the amendments
were published by the Official Gazette No. 55 on 04.07.2014?

7. In favour of Who did the same very criminal ring violate deliberately Ordinance No. 6 of BNB
regarding collaterals upon provision of state assistance and provided it to FIB against pledging a
credit portfolio of BGN 1.336 billion, which is explicitly inadmissible pursuant to the pointed
out ordinance of BNB? Or who did commission them to do it?

A number of the participants in the consultative meeting of the political leaders with the
President discussed with a great conviction that the value of 5 assets of CTB only could cover
the gap (the pit) of BGN 3.5 billion and that they knew them. No matter which assets each
of the persons who mentioned them had in mind whether a combination of BTK Vivacom/
NURTS AD, Avionams AD, Dunarit AD, Garb, First Digital, or a combination of any of them
with Petrol AD, Technomarket AD, Rubin AD, Gips Koshava AD, Kostenets HHI AD, Rousse
Shipyard AD and many others, is not important, but why did they not use them as an extremely
serious and quickly liquid collateral against state assistance for CCB? Or why did they not allow
to third parties - the EPIC Fund for example to use them as an instrument for the recovery of
CCB after the stroke on liquidity because of the mass withdrawal of deposits?

In this respect, impressive is the fact that just the biggest of these assets, according to Tsvetan
Vassilev, were asked by Delyan Peevski to be provided to him free as a calmness fee
guaranteeing the existence of CCB.

We would like to know why the state did not interfere to preserve the Bulgarian
Telecommunication Company (BTC) as Bulgarian ownership, by which more than BGN 1 bln
would have been returned to CCB. The proceeds of BTC for the last three years exceeded BGN
1 billion. Why did BNB vote (not vote) at the General Shareholders Meeting of Bulgartabak, by
which they would have guaranteed to a great extent the recovery of over BGN 40 million in
CCB? A share and dividends from the profit? Why did the state compel CCB through the BDIF
to guarantee by all legal, or rather illegal actions the sale of Avionams against a price, three
times lower than the credit due of the company to CCB? (They boast today that Avionams has a
contract with NATO for about USD 160 million, however, despite it, the company is in the
group with impairments of between 80 and 100%.) Why not a single lev did enter CCB from the
acquisition of NURTS? Why a literary raider attack is applied to Dunarit and other companies
from the military-industrial complex of Bulgaria with the instruments of the state compulsion,
and apparently the purpose of the company/companies to change their owner against the
protection of the license, i.e. the bread and the livelihood of thousands families, including of the
companies subcontractors?

We actually know why. The answer of this question is known by the whole Bulgarian society.
Who are guilty for the theft of the centure? You will know them by their new ownership,
acquired from CCB!

8. Who owns Rubin AD, Gips AD, Avionams, the big land plots along the Black Seaside, the
building of CCB on Garibaldi Square today? We have asked this question, however, related
not only with these and with dozens of other assets of the bank, acquired in bandit-mafia way,
by means of dozens of signals to the Chief Prosecutor. Without any consequences

9. Were the set-offs under transactions for BGN 100 million of FIB and Delyan Peevski for Rubin
AD, Gips AD, the set-offs of Slivia Peneva (Managing owner of Deloitte Bulgaria) to a
company from the orbit of CCB declared invalid?

The questions, to which not only the members of the robbed depositors but the whole society requires an
answer, are related, according to us, to extremely insolent and arrogant corruption schemes and
practices, beneficiary of which are political persons mainly from the WHO Ring MRF and GERB. The
tastiest and most expensive assets of CCB became property of persons of these vested groups of interest,
and they did not pay a single penny for them.

For us, the mere fact that none of the about 40 signals to the Chief Prosecutor for transactions with assets
of CCB and violations of the law on behalf of BNB, conservators, receivers, protected witnesses to the
Prosecution supported by documentary evidences did not reach even to the phase of preliminary
proceedings, is a proof for corruption practice, related to the executive and legal power.

According to the CCB case, our observations and participation with appeals, claims, inquiries under the
Access to Public Information Act, signals to the Prosecution Office and the European Commission show
that not a single step in the procedures and decision of BNB, the Supreme Administrative Court, the
National Assembly are not legal. By starting with the lack of qualification of the conservators of CCB
that would lead to nullity of all deeds and decisions in any normal country abiding the law until the
withdrawal of the license of CCB. The most drastic issue is that the decisions of the Governing Council
of BNB for placement the bank under special supervision dated 20.06.2014 and for withdrawal of the
license of CCB dated 06.11.2014 are both illegal and inconsiderate pursuant to Article 151 (1) of the
Credit Institutions Act providing in the measures under Item 24 of Article 103 (2) (special supervision)
and Item 25 of the same article (withdrawal of the license), decisions regarding these issues should be
made by the Governing Council of BNB explicitly upon the proposal of the Governor of BNB and the
Deputy Governor responsible for the Banking Supervision. Tsvetan Gounev is the actual Banking
Supervision Deputy Governor by both dates, however he was on an annual leave. The proposals were
made by [Governor] Ivan Iskrov and the acting Deputy Governor N. Kordovska who replaced the head
of the supervision Gounev, however she was not the Deputy Governor Gounev who was elected by the
National Assembly.

And last but not the least in this analysis of the transcript of 14.07.2014, we will mention the
proposal/question of Lyutvi Mestan why the guilt of depositors is not sought after (investigated). It is
not in vain. Upon each experience of ours to request clarification of the truth, justice and
punishments for the guilty persons, we personally and the companies that we manage or in which
we work, become a subject of interest for the state bats the instruments of compulsion NRA and
the Prosecution Office.

Then let us plead guilty until proving the opposite!

We can speak much more regarding the CCB case. But making an analysis of one of the most significant
and hidden so far documents, the transcript dated 14.07.2014, we found doubtless facts, as follows:

Due to the fact that it is categorically clear that there is proven loss (capital deficiency) of BGN
3.5 billion, the license of the bank was withdrawn due to political reasons, including winning of
the early elections by GERB and receiving control over the executive and legislative powers.
BNB, the Prosecution Office and the State National Security Agency are culpable for the
deliberate bankruptcy both technically and tactically, and part of the transaction is the
guaranteeing to the participants in the rampage and to the beneficiaries from the future robberies
nonjurisdiction and a guarantee for non-searching of responsibility and guilt. The events
between 2014 and 2017 and the embezzlement of assets of the deliberately bankrupted by BNB,
the Prosecution Office, the executive power, the political parties CCB unambiguously proved
that the goal is robbery. The indirect and non-quantified so far harms and damages for the
country are related to the reduction of the foreign and internal investments, desertion of capitals

and savings. 30 % of the middle class are destroyed, and the CCB case jointly with the personal
contribution of the GERB leader contributed additionally for the profound social division.

Officially, the decision for liquidation was taken on 14.07.2014. The amount of the capital
deficiency was also confirmed there, after it was decided at another place. It represents to a great
degree of precision, but is not restricted to that, the value of the tastiest assets of the bank whose
acquisitions have started. The decision of the political leaders at the explicit request of Lyutvi
Mestan was to keep complete silence regarding this decision for liquidation. Instead of an
immediate withdrawal of the CCB license, BNB misled the whole society that the bank would
be possibly opened after 3 or 6 months. Apparently, the goal was by placing the bank under
special supervision for up to 6 months, and usually in such a case even the most conscientious
borrowers stop to service their obligations, the impairments to form a figure close to the amount
of shortage fixed to BGN 3.5 billion at the meeting. Non-servicing of a credit of 180 days (six
months) leads to its impairment by 100%. This is according to official bank regulations. The
shortage of a few days to the cherished 6 months predetermined also the average percentage of
impairments over 93 %! But they brought the loss the capital shortage at the amount
required by the commissioner!

The society was not only misled regarding the intentions of the BNB and the executive power,
but forced to enter an international robbery- spying tracing scenario by hiring the
counterfeit company Alixpartners, which had to search the CCB money in third countries, where
there was no such money. As there is no such money with one exception the glass plant
Paracin [in Serbia]. All assets and investments of CCB are in Bulgaria.

Besides the direct authors and beneficiaries from the bankruptcy and the free absorption of the
assets of CCB, there is another group of beneficiaries. The borrowers. Under the same scheme
as in 1996-1997, they literary cleaned all their assets to third conscientious parties by means
of the prolonged procedures for pushing the CCB in liquidation and the targeted, anti-national
regressively acting changes in laws (Bank Insolvency Act etc.). Just because of that, despite the
fact that we are opponents to conspiration theories, the whole scenario for liquidation of CCB
reminds an attempt of coup under which the banks are blown up, the obligations of
borrowers disappear, the currency board is eliminated.

The refusal of those in power to treat equally CCB and its clients in comparison to the other
Bulgarian banks and their clientsm, that were provided state assistance is not only a drastic case
of discrimination but a loss of about 10% of the money available in the country savings of
people and companies and one of the factors for the further pauperization of the Bulgarian
population under which indicator our country ranks last in EU. Lost for their owners are also
assets worth over BGN 4 billion that passed into ownership of oligarchs for pennies and
solidified the oligarchic and mafiotic model of management dedicated to robbing Bulgarians and
the State of Bulgaria. They are also lost, as these people know how to steal a lot but are not
able to manage and generate incomes, earnings, prosperity for the state, for their employers and
for themselves.

For the case of CCB there is one definition only, made by Lyutvi Mestan at the meeting of 14.07.2014,
where he said: we are obliged as politicians to see how we look throughout the world. In the eyes of
the world this is not an issue of a bank crisis in Bulgaria, this does not concern the bankruptcy of a bank,
the world sees something much more dangerous in Bulgaria. What is seen abroad is that this is a product
of serious systematic corruption; these are the claims that this is a product of non-regulated relation not
just of politics and business, non-regulated relation between institutions and criminal business. This is
the way it looks like.

That is this does not mean whether there are formally established regulations and institutions and that the
problem with the inefficiency of the regulations is actually a product of the much more dreadful event,
the systematic event that these regulations are quasi regulations. That is how we look. I think that for this
bank in particular, none of us would be left alone until we do not reach to the heard of the matter. They
will not leave us alone and nobody from abroad will leave us alone. And I do not expect anybody here to
feel sufficiently calm regarding his or her responsibility.

Dr. Vera Akhoundova

Daniel Bozhilov