A Wolf Battue

Rumen Gaitansky - the Wolf

A Wolf Battue

The Prosecutor's Office and the Anti-Corruption Commission go after Rumen "the Wolf" Gaitansky, Stoyan Mavrodiev - and potentially, Ahmed Dogan himself

Rumen Gaitansky - the Wolf

© bgdnes.bg


In 2019, the state-owned Bulgarian Development Bank (BDB) was literally given for personal use to the MRF and in particular to Delyan Peevski - then, just an MP from the Turkish party, who is now its co-chairman, who tried to take it over completely. The bank began generously crediting companies linked to people and businesses with strong political connections to the party.

The zenith of the bank's transformation, which was theoretically supposed to support small and medium-sized companies, into a personal oligarchic treasury came when 150 million levs were granted to a previously unknown firm called Roadway Construction. With this money, the newly created company, linked to Rumen "The Wolf" Gaitansky, bought another company officially controlled by him - Patstroi Engineering, at an absurdly inflated valuation. Thus, the funds went to the direct shareholder of another of the Wolf's firms - Bio Mining, which was notorious for the illegal construction of the hunting lodge near the Iskar dam. Even back then it was clear that the damage to the bank's interests was practically guaranteed. The loan was announced to be non-performing a few days ago when BDB sold the collateral for just 3.65 million levs, excluding the accumulated interest.

This should not have surprised the authorities. Yet, for the past five years, despite the numerous publications, and the campaign by then-caretaker minister of the economy Kiril Petkov that highlighted the problems of the BDB, and alerts from the new management of the bank that took over in 2021, the state institutions, including the prosecutor's office, did not bat an eye. Until now.

A sudden urge for anti-corruption

On August 9, the Anti-Corruption Commission (ACC) surprisingly announced that it was investigating the case. And on August 14, TV news channels were abuzz with the news of an ongoing raid in which properties linked to the Wolf were being searched. No official information was ever given as to what exactly was being searched or whether any charges had been laid, but later in the day, in familiar style, journalists were allowed to photograph Gaitansky's luxury car fleet, as some of the vehicles had been impounded with court permission.

This has been a common practice for turning public opinion during swoops on other prominent businessmen such as Nikolay and Evgeniya Banevi, Vetko and Marinella Arabadzhievi, Minyu Staykov and Vasil Bozhkov. Properties linked to Gaitansky's companies in Sofia and Kardzhali were also searched. According to BNT and Nova TV, properties connected to former BDB CEO Stoyan Mavrodiev, with whose signature the loan was granted, were also raided.

ACC vs. the Wolf - or someone else?

The first possible explanation for the delayed action by the prosecution and the ACC is that they somehow latched on to the case following attempts by the BDB to cash in the loan collateral and seal its loss on it that began in June. However, this can in no way justify the law enforcement authorities who were alerted as early as 2021 but quietly terminated proceedings in 2023.

All this implies the existence of an institutional umbrella over Gaitansky's interests that has been lifted. In other words, the same institutions that have benevolently turned a blind eye to how the state bank has fed companies of one of MRF's closest allies suddenly remember their duties and pursue them vehemently.

The sudden outburst of activity should not be surprising when put in the larger political context. It comes just as Delyan Peevski has launched a total war on the honorary leader of the MRF Ahmed Dogan over the control of the party. Hence, a number of politicians saw it precisely as an attack by the Magnitsky-sanctioned MP against the honorary leader. Rumen Gaitansky has for years been considered extremely close to Dogan.

The new revelations of the ACC are precisely aimed at the Gaitansky-Dogan nexus. The anti-graft body claims that part of the loan granted through Bio Mining ended up as a loan to Crystal Water. "From the analysis of the documentation gathered, it is established that Crystal Water Plc is a guarantor of a loan agreement between D Commercial Bank and TPP Varna Plc (owned by Dogan - editor's note) dated 2019. There is evidence that the time period in which this was done coincides with the provision of a loan of 30 million levs by the company Bio Mining Plc to Crystal Water Plc," the ACC said in its 9 August announcement. According to the ACC, Crystal Water Plc subsequently assigned its claims to Gaitansky and he personally was a creditor of Dogan's TPP.

Hunting season for culprits

So far, the prosecutor's office has not said anything on the subject, so it is unclear if, when and against whom charges will be brought, although according to the ACC "there is a reasonable presumption that there has been wrongdoing that has resulted in significant harm to the BDB, respectively the financial interest of the state."

The names mentioned so far are Rumen Gaitansky and Stoyan Mavrodiev, but in reality, the formal approval of the problematic loan has happened with the signatures of a myriad of people. The loan proposal, prepared by the bank's expert Stanimira Malinovska, was coordinated and received positive opinions from the heads of the Corporate Banking (Nikolai Mirchev), Risk (Valery Marenski), Legal (Tihomir Chamshirov) and Security (Ludmil Selanovski) departments. The decision to grant the loan was then taken on 8 April 2019 at a meeting of the Bank's Board of Directors by Stoyan Mavrodiev and the other two Executive Directors, Nikolay Dimitrov and Rumen Mitrov. The first two subsequently put their signature to the contract itself. The loan also received the unanimous approval of the supervisory board - its chairman Lachezar Borissov, Mitko Simeonov and Velina Burska. Borissov at the time was deputy to Economy Minister Emil Karanikolov, who is the principal of the BDB. The latter was among the ministers who was replaced in 2020 by PM Boyko Borissov because of allegations that he was tied to Peevski and Lachezar Borissov rose to minister and subsequently became a candidate for deputy from GERB.

On the borrower's side, there were a number of proxies who acted as the formal owners and managers of Roadway Construction. Adding to the uncertainty of who will be charged is the doubt as to whether there will be anyone arrested in the first place. BNT initially reported that unofficial information suggested that Gaitansky and Mavrodiev had left the country days ago. It was later clarified that Gaitansky had returned at the end of last week, but today he "neither answered his phones nor was found at any of the known addresses." Mavrodiev, on the other hand, was reported to be in Greece.

Lastly, according to an entry in the Commercial Register from this week, Ahmed Dogan is no longer owner of TPP Varna. While it is unclear whether there is a connection between this event and the upheavals around Gaitansky, it is likely that the move aims to prepare the honorary chairman of the MRF to brace himself for the full-on impact with Peevski by severing his ties to controversially acquired businesses. Which means that the war for the MRF has just begun in earnest.

In 2019, the state-owned Bulgarian Development Bank (BDB) was literally given for personal use to the MRF and in particular to Delyan Peevski - then, just an MP from the Turkish party, who is now its co-chairman, who tried to take it over completely. The bank began generously crediting companies linked to people and businesses with strong political connections to the party.

The zenith of the bank's transformation, which was theoretically supposed to support small and medium-sized companies, into a personal oligarchic treasury came when 150 million levs were granted to a previously unknown firm called Roadway Construction. With this money, the newly created company, linked to Rumen "The Wolf" Gaitansky, bought another company officially controlled by him - Patstroi Engineering, at an absurdly inflated valuation. Thus, the funds went to the direct shareholder of another of the Wolf's firms - Bio Mining, which was notorious for the illegal construction of the hunting lodge near the Iskar dam. Even back then it was clear that the damage to the bank's interests was practically guaranteed. The loan was announced to be non-performing a few days ago when BDB sold the collateral for just 3.65 million levs, excluding the accumulated interest.

By using this site you agree to the use of cookies to improve the experience, customize content and ads, and analyze traffic. See our cookie policy and privacy policy. OK