Tsvetan Vasilev

By 2014, Corpbank was Bulgaria's fourth-largest bank.[16] The bank held an extensive portfolio of companies and was the only bank in Bulgaria investing in start-ups and entrepreneurs. Because the bank was making these types of investments that no other banks were doing, its profits and regional power grew. Until its destruction by Bulgarian regulators and the looting of its assets, Corpbank was arguably the most innovative and entrepreneurial bank in the Balkans.

Starting from scratch in 2001, it was a pioneer in export financing to Bulgarian energy producers and ammunition manufacturers previously without banking options. Unlike its rivals, Corpbank also made direct investments in its clients and emerging enterprises in Bulgaria, most notably the country's leading telecom Vivacom, which it bought from creditors along with affiliates of VTB Capital in 2012.[17][18] Vivacom is the leading market provider in Bulgaria for a variety of telecommunications services, including landline, mobile, Internet, radio, and TV. It has approximately 3,500 employees.[19] Vassilev saw the opportunity and raised the capital to make the purchase.[19]

Experts claim that the Vivacom deal was amidst the most complicated ones on the Bulgarian financial market.[20] The restructuring was approved by the European Commission and the international creditors of Vivacom.[21][22] Prior to the acquisition by Vasilev and VTB Capital, Vivacom had incurred significant debt after a buyout by AIG in 2007, which subsequently sold its shares to PineBridge Investments.[23]

The company's 2013 financial report showed considerable improvement: EBITDA increased from BGN 267 million to BGN 339 million.[24]

Because of its growth, wealth, and power, in April 2014 one of the most influential political parties in Bulgaria (DPS) visited Vassilev. The request was simple: transfer assets for free to the "mobster circle of DPS." Vassilev refused.

Suddenly, by June and July 2014, Corpbank customers withdrew cash in a panic. Prior to the bank run, several Bulgarian media outlets ran stories accusing Vassilev of trying to organize the murder of a media titan who had close connections to the government, Delyan Peevski. Prosecutors raided companies affiliated with Corpbank. They confiscated financial documents from those companies. TV stations ran live feeds of the prosecution's raids. Over the course of 4 days, over 20 percent of Corpbank's assets were withdrawn in cash by depositors.[25]

After the bank run, Corpbank was closed for six months. Customers could not get money out. The Bulgarian government's currency board denied the Bulgarian National Bank (BNB) from creating money to pay Corpbank's customers. According to Forbes, "Paying off depositors was therefore impossible. But reopening the bank was not an option either since that would simply re-start the run. Therefore, the BNB kept the bank "on ice".[25]

In June 2014, Corpbank collapsed following a bank run during which the equivalent of nearly 20% of its assets were withdrawn.[26] Corpbank was officially shut down and placed under the special supervision of the Bulgarian National Bank on 20 June 2014 after a request by its management.[27] The bank's management applied for special supervision because the Bulgarian National Bank refused to provide liquidity support.[28] According to media reports at that time, the shutdown was due to a dispute between Vassilev and "Bulgarian media oligarch Delyan Peevski."[25]

After spending some time in Austria, Vasilev is currently residing in Belgrade, Serbia where he was granted political asylum.[29] He voluntarily surrendered to Serbian police officers on 16 September 2014. In March 2015, the Appellate Court of Belgrade ruled against an extradition request by the Bulgarian authorities.[30] The Appellate Court of Belgrade conclusively refused to extradite Vasilev to Bulgaria in May 2022.[31]

After inexplicably modifying charges several times, in July 2017 Bulgaria's prosecution indicted Vasilev with embezzlement along with 17 other people.[32] According to Reuters, the case is "seen as one of the Balkan nation's biggest post-communist fraud investigations".[16] The Prosecutor's Office set a record by drafting an indictment which is more than 5000 pages long: Bulgaria's Deputy General Prosecutor Ivan Geshev has compared writing it to landing on the Moon with a diesel engine and transplanting a brain.[33] However, it has been observed that two-thirds of the indictment do not seem to be related to the charges.[34]

Vasilev argues that the charges against him are political.[35] He has successfully challenged the withdrawal of the bank's license before the European Court of Human Rights which established violations of the right to property and the right to a fair trial.[36] In August 2017, he also submitted an application under the US Magnitsky Act, which sanctions corrupt government officials implicated in human rights abuses, against Bulgaria's General Prosecutor Sotir Tsatsarov and media mogul and Member of Parliament Delyan Peevski.[37] His application has been supported by Bill Richardson.[37]

"Delyan Peevski is simply one of the main tools that the Bulgarian political mafia uses to blackmail Bulgarian business—the visible part of a rather large iceberg of corruption," Vassilev said in a Forbes interview. "The political mafia is persistently trying to downgrade what happened to Corpbank to a personal conflict between Mr. Peevski and me, which is utterly untrue. I had a conflict with the political mafia ruling the country, which has been blackmailing and threatening me for many years."[25]

In 2019, Bulgarian authorities arrested key witnesses in the ongoing trial: critics argue this is an illegitimate attempt to influence their testimonies.[38] The government is also going after Vasilev's wife who is a university professor by raising charges.[39] Meanwhile, the government amended Bulgaria's criminal codes in a rush several times: in the eyes of Bulgarian jurist Tatyana Doncheva, these amendments were made to help the Prosecutor's Office in the trial against Vasilev by compromising the equality of arms in criminal proceedings and by making it easier to convict people based on fabricated charges.[40] The Association of Bulgarian Judges has deemed that many of these amendments are anti-constitutional.[41]

After Corpbank's shutdown, insolvency proceedings were officially initiated. Corpbank's clients, however, repeatedly warned that Bulgaria's authorities were violating the creditors' interests.[42] Media reported that assets were deviated by companies and persons allegedly affiliated with Delyan Peevski and the witnesses against Vasilev.[43][44][45]

Vasilev also argues that Bulgarian authorities close their eyes to irregularities in the insolvency proceedings. He was concerned about the fate of Corpbank's strategic assets, such as Vivacom. In particular, VTB Capital controlled 33% of Vivacom through their daughter company Crusher even though they were not the true owner as the price of the shares had already been paid by Corpbank's SPV Technological Center-Institute for Microelectronics (TC-IME).[46] In murky circumstances, the shares of Vivacom were sold by VTB Capital at a devalued rate at a tender in London to Bulgarian Spas Rousev in September 2016.[47] There is pending litigation before the London High Court for allegedly illegal seizure of the equity stake in Vivacom.[48] Vasilev has raised concern that Vivacom's new owners would probably fail to pay the company's debt to Corpbank and would hurt the interests of the creditors in the insolvency proceedings.[46] It has been suggested that Spas Rousev is a strawman of Delyan Peevski.[49]

In the past, Vasilev had tried to strike a deal with a Belgian investor who was supposed to find financing for Vivacom's debt towards Corpbank, but it fell through.[50][51]