The total market capitalization of the public companies traded on the Bulgarian Stock Exchange (BSE) has halved. On April 4 the Financial Supervision Commission (FSC) announced it was delisting Capital Concept Limited from the public register, as the company did not publish an annual report and other required documents on time. The last time it did so was in 2021.
With market capitalization of 16.4 billion levs (8.4 billion euro), Capital Concept was the largest company on the BSE. However, it is difficult to say that this value was backed by any foundation or liquid trading, as the last transaction with the company's shares was concluded in February 2022. Trading in the shares was halted by the BSE at the end of October 2023 to comply with a decision by the FSC. The company, which has Chinese capital, had grand development plans that never materialized.
Huge capitalization
Capital Concept was founded in 2008 under the name of Welcome Holdings and presented plans to build the "Bulgarian Las Vegas", an entertainment complex in the village of Musachevo near Sofia. To this end, in 2017 the company increased its capital from 54,000 levs to 2.1 billion levs. However, the project, which should have been completed long ago, never came into being. Subsequently, the company changed the location to another village near Sofia - Kutina. That project also failed.
In 2017 the company published a prospectus with the intention of listing all its shares on the BSE. The company detailed its plans, which included the construction of a business center, mall, hotel, casino, water park, exhibition center and office buildings near Sofia. The deadline indicated in the prospectus at that time was just under two years.
Chinese connection
According to the shareholder book, 99.7% of the capital of Capital Concept Limited is held by eight legal entities: five companies from Hong Kong and one from Macau, the United Arab Emirates and the British Virgin Islands each. The remaining 6.5 million shares or so (under 0.3% of the capital) are owned by 40 individuals: 38 citizens of Chinese origin and two Bulgarian citizens with a minor stake (221 shares altogether).
The interesting list of shareholders has one possible explanation - parallel to its official activities (or lack thereof), the company could have been potentially used as an expensive instrument for obtaining "golden visas" and "golden passports". At that time the Bulgarian legislation allowed for wealthier foreigners to "buy" Bulgarian citizenship or the right to reside in the country (and the EU) in exchange for an investment of at least 1 million levs. In March 2022 that possibility was revoked by the Bulgarian government.
No reporting
The reason why the FSC has delisted the company is the lack of annual and quarterly reports that every public company is required to publish within a certain period. The last report Capital Concept Limited published was for the first half of 2021. In it, the company, which does not actually conduct any business, declared revenues of 57,000 levs and a loss of over 1.6 million levs. According to the report, the company had made an advance payment related to the acquisition of land in the village of Kutina.
At that time the Capital Concept group included six subsidiaries: Golf Club, which is associated with St Sofia Golf Club and Spa in the village of Ravno Pole (in 2021 the National Revenue Agency seized the property due to outstanding liabilities), and St Sofia Resort, Bulgaria Development /Holdings/ Limited, Vitosha International, Modern Investment and Profit Well Properties, which were related to the stated investment. None of them has published a report since 2021.
It is precisely because of this lack of reporting that in October 2023 the FSC suspended trading in Capital Concept Limited's shares. After expiration of the term for appeal, the business was delisted on April 4, 2024.
The total market capitalization of the public companies traded on the Bulgarian Stock Exchange (BSE) has halved. On April 4 the Financial Supervision Commission (FSC) announced it was delisting Capital Concept Limited from the public register, as the company did not publish an annual report and other required documents on time. The last time it did so was in 2021.
With market capitalization of 16.4 billion levs (8.4 billion euro), Capital Concept was the largest company on the BSE. However, it is difficult to say that this value was backed by any foundation or liquid trading, as the last transaction with the company's shares was concluded in February 2022. Trading in the shares was halted by the BSE at the end of October 2023 to comply with a decision by the FSC. The company, which has Chinese capital, had grand development plans that never materialized.
