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Tzvetan Vassilev on Dunarit, military markets, and the thefts by Peevski’s gang

SOFIA, (BM) – The topic of the financial and commercial condition of the Bulgaria’s Dunarit ammunitions plant, as well as company’s fate, still remains relevant until today, and at the same time unknown. We contacted Mr. Tzvetan Vassilev to get his answers on the topic and to tell us more about what really happened back in 2014.

The questions were asked by Boyko Nikolov.


Q1: Mr. Vassilev, thank you for agreeing to answer a few questions related to the Dunarit ammunitions plant. I am interested in your opinion as a businessman who managed the company’s assets. What was the financial situation of Dunarit before the “famous bankruptcy” of Corpbank — were there any product orders or forthcoming performance contracts or renewed licenses? Briefly, if the Corpbank’s equation had not existed, what business and public environment would Dunarit have been in?

Tzvetan Vassilev: First of all, I would like to emphasize that Dunarit was one of the many industrial assets acquired through de facto SPV companies financed by Corporate Commercial Bank (Corpbank). The history and development of Dunarit after its entry into Corpbank’s investment portfolio is indicative of the philosophy of our management and our investment policy.

When it was privatized back in 2004, Dunarit was, in fact, a bankrupt company with an annual production and sales volume of BGN 1-2 million and debt of over BGN 30 million. With patience and professionalism, within 10 years, Dunarit became one of the most financially stable companies in the industry sector and a desirable partner for a number of international companies such as Alliant Techsystems, General Dynamics, etc. Of course, this would not have been possible without adapting the production process to the modern requirements for quality and product diversification of the markets, the investments in machinery and enhancement of the production capacity (over 40 million BGN for the period), including in the only chamber in a Bulgarian plant for the destruction of fuses, investment in new products, including joint projects with leading companies such as IMI, etc.

After 2009-2010, due to the revival and the serious increase in the demand for Dunarit’s products in certain markets, its financial condition improved drastically. At the time of the organized bankruptcy of Corpbank, Dunarit performed between BGN 60 and 80 million annual orders exclusively for export. In the period 2014-2018, the annual volumes exceeded BGN 100 million, regardless of the hostile environment surrounding the company.

It is obvious that a company that has been “drained” by me, as the propaganda machine insinuates, can neither survive nor pay off the criminal debt imposed on it by the State Consolidation Company [SCC – ed.] with its own funds. The development of both Dunarit and the majority of companies in Corpbank’s investment portfolio after its bankruptcy only proves the good financial condition of the bank and the untenability of the thesis that Corpbank was a pyramid which was drained. The latter absurdities, of course, are disseminated not only by Delyan Peevski and Bulgaria’s Prosecutor’s Office, but also by a number of media claiming to be objective.

Q2: I have to ask you. The whole drama about Dunarit in recent years leaves me with a “very bitter taste in the mouth” that doesn’t give me peace — why has the state harnessed all its arsenal and resources to “save” an ammunitions plant but didn’t try to do the same with Corpbank? I’m asking because let’s tell the truth — Dunarit is not some production factor on international markets, while Corpbank managed billions. Isn’t it logical, if the fourth bank in a country hypothetically has difficulties, the state, represented by the BNB [Bulgarian National Bank – ed.], should try to save the bank’s capital and assets, to save people’s money or to ensure that some subsequent financial monitoring or control will bring back the Corpbank to function normally? The Americans did it, so did the French, the Germans.

Tzvetan Vassilev: The thesis that the Corpbank’s assets are threatened by me and “must be saved” has a single purpose — their controlled acquisition by certain people at prices, many times below their objective market value. This is the case of Vivacom / NURTS – the main difference here is the participation of the Russian VTB in the theft. This is the case of Avionams. We should also mention the bandit “acquisitions” of Petrol, Rubin, Technomarket, Gypsum, Castra Rubra, Litex Motors, IPK Rodina, Sofia-Press and a number of other significant smaller assets.

In fact, if the state had wanted to protect Corpbank, it would not have allowed the vandal corporate raid in June 2014, organized by the center around Delyan Peevski with the active leading role of the Prosecutor’s Office. And after all this was allowed to happen, the bank’s recovery, despite the absolutely working proposal of By the State General Reserve Fund Oman (SGRF), the sovereign wealth fund of Oman, never entered the state’s plans for the simple reason that instead of in the accounts of Peevski and company, the proceeds from the sale of its assets would have gone to the bank. And then the untenability of the thesis that “I drained Corpbank” would have been exposed to the public. Now the profits are for Peevski and his circle, and the accusations and humiliations — for me and my colleagues.

Currently, the Tantalean torment experienced by certain banks in their attempt to pass the ECB stress tests [European Central Bank – ed.] despite 6 years of tolerance, the absolutely favorable market environment until the end of 2019 and the numerous manipulations of their financial results under the silent eye of Bulgaria’s central Bank (the BNB) and in particular its Banking Supervision department only goes to show how “objective” are the claims that Corpbank was a bad bank and all other banks in the system were “good”.

Q3: Definitely some Bulgarian media, which are circling near Delyan Peevski, have been attacking and accusing you in recent years. The Minister of Economy of the Republic of Bulgaria Emil Karanikolov also joined their rhetoric, announcing that your offshore company “holds Dunarit”. Does your offshore company “hold Dunarit”? Do you have a share in an offshore company that owns Dunarit?

Tzvetan Vassilev: I have already mentioned in my previous answers that for the acquisition of the Corpbank’s assets the bank used certain companies – de facto SPVs — for the realization of the ownership. Some of them had a serious capitalization because of successful investments. All these companies had de jure different nominal owners (these companies were registered, controlled and their bookkeeping was kept by the chief witness of the Prosecutor’s Office Biser Lazov and his “team”) but the real owner was de facto Corpbank.

In this regard, both the collateral and the sources for repaying the loans of the so-called “empty” companies, as the Prosecutor’s Office insinuates, have always been the operating companies and assets. These practices are easily proven by cases involving the sale of significant assets such as Elovitsa, Stanyantsi Mines and Beli Breg Mines, Vamo-Varna, the Electronics plant, the terrain behind Central Train Station in Sofia, and many others.

The same happened with most of the proceeds from the sale of the bank’s shares from my sole proprietorship Bromak. This would have happened too after the sale of Vivacom, planned for 2015, from which we expected a net EUR 500 million for Corpbank. NURTS, whose sale had started and which we expected to complete by the end of 2014, would have been sold at a minimum price of EUR 130-140 million. Anyone who understands at least a little about bank balance sheets could realize what Corpbank would have looked like with BGN 1.3 billion less loans and the profit of the two main investment companies – Bromak and TC – IME – from over EUR 300 million. Whether Corpbank was “drained” is best illustrated by the valuation by a reputable US company of only 13 industrial assets of Corpbank, exceeding 1.7 billion euros.

As for Dunarit’s ownership, Peevski’s minister, who was diligent and not very intelligent, was probably targeting the company that owns 90% of Hedge Investment. De jure, I was its owner for a short period of time – May 2014-January 2015, but the de facto owner, like other companies, was the bank, because the interests of Corpbank have always been a priority. In the end, the leading thing for me is that the offshore company has neither harmed Corpbank nor Dunarit in any way. On the contrary, with the bankruptcy of Corpbank, the company lost its assets. Here I think that the answer to the question why the state, especially through the nimble Minister Karanikolov, but also with the CPC [Commission for Protection of Competition – ed. ], the Registry Agency, CCCCIAP [Commission for Combating Corruption and Confiscation of Illegally Acquired Property – ed.], etc., performs a series of violations and outright crimes, is much more important.

In practice, the state is openly working to its detriment and to the detriment of creditors, and through the Bulgarian Deposit Insurance Fund, it is the main victim. At least for me the answer is clear – these are the characteristics of a country captured by the mafia.

Q4: If Dunarit becomes a state-owned company, it will not prosper. Simply because our country does not live in the modern military industry, does not know how to work in the changing competitive market, and at least – does not have the intellectual capacity to make this company competitive outside Bulgaria. My personal opinion, but the question is – in the attempts for nationalization whether the state is looking for a future economic lever through which to influence the financial and commercial condition of private Bulgarian companies in the defense sector in their joint work with Dunarit, or is it just an attempt to sell some private assets, but in favor of the state? Or is it something else, maybe a theft?

Tzvetan Vassilev: The tendency to nationalize that we have noticed lately definitely shows nostalgia for the formula of the Multigroup (of the Communist State Security known as Darzhavna sigurnost), when numerous of its structures stood both at the entrance and the exit of the operating state-owned companies. I have no doubt that this gang, with Peevski’s face, does not want to develop and manage, but to drain. That is why state ownership is very convenient for them. I am not convinced that they “sincerely” want to nationalize Dunarit. The idea of nationalization is very convenient for their populist propaganda. I know for sure, however, that the motive is very simple — they do not want to allow E. Gebrev to pay BGN 60 million in the bankruptcy estate of Corpbank. To thwart this, they turned the SCC into an illegal factoring company, which paid Corpbank about 2 times less, but Peevski, through Viafot and DP Investment, was generously rewarded by the trustees with assets of over BGN 150 million. Naturally, both Borissov and the Prosecutor’s Office are silent. Maybe because Dobrin Ivanov defends not only Peevski’s interests.

And how successfully state-owned companies are “managed” can be judged by the condition of the state-owned Avionams, which the state “valued” at a price 3 times less than the price at which it sold it in 2009. Only for the minority stake, the state received EUR 10 million in 2012. At the time when Avionams was “owned by Tzvetan Vassilev’s offshore company”, as they present the story, the company received all NATO and Vertoleti Rossii (Russian Helicopters) licenses to repair MI17 helicopters, despite the intrigues created by the Bulgarian Ministry of Defense. In addition, Avionams won a contract to repair 36 machines worth more than $ 180 million, with an estimated management profit of more than $ 30 million. According to the information that has reached me, at the moment, Avionams is not fulfilling its obligations under the contract due to lack of funding, and at the same time it is not able to pay its debts to the state. However, there is probably a “professional” company between the Russian suppliers and Avionams, which collects the profit guaranteed by us and the management of Avionams from the contract, which we reached after 5 years of dedicated efforts and dozens of trips and negotiations in Moscow, Washington and Brussels by me and the management.

Q5: Just a few weeks ago, another defense company, Emco, threatened to protest after the end of the state of emergency because, I quote, “a plan is underway by the Minister of Economy and a group of related persons to steal another contract for the export of our products to markets to NATO and to transfer this agreement to companies from a certain environment.” Has such pressure been exerted on you or on Dunarit management while it was under your control? Were there any attempts for state intervention to influence the positive development of the company? Did politicians ask you “Dunarit to do something or not” in favor of someone else?

Tzvetan Vassilev: Let’s not forget that the defense industry was not such an appetizing bite for a long time. The recovery of the markets definitely started after 2009-2010. At the same time, the maintenance of the production capacities required investment, which does not fit into the “investment plans” of those who govern the state.

However, some had seen the potential in a timely manner, after requesting 50% free of charge from Dunarit and Avionams back in 2009-2010. Then, to protect the main asset — the bank, whose destruction became the focus of a financial-media group, which was a partner of Borissov in his first government, when he came to power in 2009 — we transferred the shares to a company, nominated by the closest friend of Borissov at that time – Staliyski. This was a classic form of racketeering, which became the norm after Borissov came to power. Then we bought the same shares in 2013. Since there is a specific next question on this topic, I will limit myself to this.

It is obvious that the boom in the markets of military products from the period 2012-2018 has increased the appetite of the gang. Naturally, their ambitions do not include investment and the risks associated with it, but only control, racketeering and theft. And this racketeering is most easily carried out through the control over the Interdepartmental Commission for the export of special products. I have received information that it has passed under the control of the gang around Peevski since the time of Oresharski’s Government, and now, through Karanikolov and Karakachanov, they not only have information about exports, but naturally use it to their advantage. There is talk of racketeering practices (percentage of exports), as well as refusal to issue permits, as is obviously the case with Gebrev. At the same time, they use Kintex and VMZ Sopot, controlled by them, as well as a number of listed traders from their quota – Mandjukov, Dobrin Ivanov, etc. – for alternative producers and exporters. Similarly, two years ago, at the risk of losing the Indian market, they stopped Emco’s exports. In the same period, Peevski’s puppet – Karanikolov — was used to terminate Emco’s long-term contract with a Serbian state-owned company in the town of Lucani, etc. I can go on with more examples, but I hope that what has been said so far confirms my words about the captured Bulgaria.

Q6: In one of your interviews you say, I quote: “Dunarit has always been a target of Peevski and Borisov.” In your opinion, what interests do Peevski and Borisov defend on the topic of Dunarit? State, foreign or personal?

Tzvetan Vassilev: I have already had the opportunity to say in an interview with Sasho Dikoff that for some time the owners of Dunarit were people from the Staliyski-Borissov circle. As a result, after the repurchase of the shares from Hedge Investment (hence the main debt of the company to Corpbank), the group was enriched by about EUR 25 million. I have documents for these transactions, including for the further movement of money to offshore accounts.

It is publicly known from my other interviews that in May 2014 Peevski, through his lawyer Alexander Angelov, demanded the same 50% of Dunarit and Avionams, among other assets of the bank, to which he never had any connection. After my refusal to respond to this racketeering demand, there was a raiding attack against Corpbank, organized through the Prosecutor’s Office, but supported by almost all media, including the state-owned media.

After placing Corpbank under special supervision on 20 June 2014, a frantic takeover of the companies with the most significant assets by Biser Lazov began, apparently under the control and approval of Peevski. It is no coincidence that Dunarit is one of the first companies that this thief and liar tried to take over. His attempt was not successful, despite the pressure, threats and, of course, the assistance of his partner in lies and theft Albena Andreeva, who quite “accidentally” found herself in the role of CEO of Hedge Investment. The two members of the board of Hedge Investment – Martin Apostolov and Lyudmila Ilieva – received fabricated accusations by the “valiant” Bulgarian Prosecutor’s Office for their role in saving Dunarit and preserving it as a serious asset for the then still desired recovery of Corpbank. It is interesting that one of the proposed persons for a member of the board of directors of Dunarit was the former co-owner of the company from the Borissov-Staliyski time – Miroslav Milenov. This only confirms the symbiosis between Borissov and Peevski in the looting of Corpbank’s assets. I am often accused that these assets were not left in the hands of the bank’s receivers in bankruptcy and thus the “interest of the state” was not satisfied. I can talk for hours about how the receivers in bankruptcy manage the bankruptcy proceedings and in whose interest. What happens is best illustrated by the “deals” around Petrol, Technomarket, Gypsum, Dunarit, IPK Rodina, Castra Rubra, Sofia-press, Rubin, Vivacom and NURTS, where the Commission for the Control of Competition, the Communication Regulation Commission, and Commission for Combating Corruption and Confiscation of Illegally Acquired Property also joined the quasi-legal misappropriation in order to be “proud” that they had “returned” EUR 122 million to the bankruptcy estate, while the net value of Vivacom and NURTS exceeded EUR 700 million.

I would never oppose the sale of Corpbank’s assets if this were done to achieve an optimal, if not maximum, price for them. Instead, we observe the actions of state institutions that have all the characteristics of corporate raiding, as it happens in Russia.

Q7: Let me turn the interview upside down. Don’t you find irony in the following – media close to Peevski “announce” the version that “Gebrev poisoning” is a conspiracy theory composed by you and the people around you (including Gebrev), but at the same time this investigation is part of the portfolio of a series of articles whose authors took the award for investigative journalism “Pulitzer? Now, looking at this from a new angle, do you think that Bulgaria deserves 111 positions in terms of freedom of speech, or have we been overestimated?

Tzvetan Vassilev: The media speculations by Peevski’s pamphlets are neither new nor of special significance. At least for me. The bigger problem for Bulgaria is the behavior of the state institutions which are supposed to protect democracy — especially the behavior by the Prosecutor’s office. The attitude of the prosecution in Gebrev’s case is illustrative of this. It wasn’t long ago – I think in 2017 – when the Chief Public Prosecutor of Bulgaria Sotir Tsatsarov made the startling claim that Gebrev had been poisoned by pesticides on the arugula salad he had consumed. Hardly anyone in the Prosecutor’s Office can explain what they had been investigating for almost 5 years before reaching a convenient, especially for some, solution – the GRU. For me, this seemingly strange metamorphosis is explained by the sharp “Atlantic” turn that Sotir Tsatsarov and Ivan Geshev took at 300 km/h after their visit to the United States last year.

I have no idea why M. Schwartz’s investigation brought him a Pulitzer since it is known that a significant part of the discoveries and revelations was made by Bellingcat and Hristo Grozev. For me, it is strange that this investigation only reaches the potential perpetrator, but does not answer the most important question – why and who ordered the poisoning? In my humble opinion, Gebrev is too small for the Russian military industry to be targeted by them. The attempt by Peevski and the Prosecutor’s Office, including through the so-called spy scandal whose aim was to include Malofeev and me in this filth, to convince us that Gebrev was purely a Russian target is simply unconvincing because Gebrev had nothing to do with Dunarit in early 2015 when he was poisoned. Here I will share that M. Schwartz interviewed me in the summer of 2019 but did not dare to include my opinion in his work. I don’t know if that was his task, but it was done brilliantly – you have the cake and eat it too.

I think that the investigation by Bivol, who are members of the Organized Crime and Corruption Reporting Project, sheds the most persuasive light, revealing possible dirty flirtations between the Bulgarian intelligence services with the Russian ones, on Gebrev’s back. And there again the name of Dobrin Ivanov stands out — the honorable merchant and owner of a media, which is a mouthpiece of the government and the Prosecutor’s Office.

So, the 111th place in the ranking for our media freedom is a great success.

***

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