Oligarch Prokopiev with a new plot to get out of debt

He manufactures a lie-riddled report to make himself out to be a c victim and hide abroad

Another plot to escape both an imminent bankruptcy and prosecution has been put into motion by the indicted oligarch Ivo Prokopiev. This one is similar to his desperate fleeing to Singapore in 2010-2013, when he posed as a victim of some supposed attempted murder in the works just so he can get out of hundreds of millions of levs in debt.

Prokopiev must lack great imagination because the plan of action is effectively the same this time around. Some days ago he concocted a report regarding another assassination plot without providing any evidence in support of his claim. However, this time he is after two goals – to wriggle out not only of debt accumulated by his companies, and skyrocketing according to the Commercial Register, but out of the growing number of legal cases against him as well.

Presently, Prokopiev is a defendant in one case (the EVN affair) and stands to be accused in another (on charges of concession fees misrepresentation and money laundering) soon once the prosecutors bring up charges. Even with these cases, however, Prokopiev has not been banned from leaving the country – i.e. if he is indeed planning to flee abroad, nothing is stopping him.

A Monitor News Agency investigation into the mystery surrounding Prokopiev’s report reveals the situation to be identical to the 2010 one. Back then, he spread the rumour that his murder had been ordered by none other than his partner in the behind-the-scenes maneuvers these days – fugitive banker Tsvetan Vassilev.

At the time, no official report regarding the threats was filed with investigative authorities, but Prokopiev did his best on the political and media front to “wag the dog” before leaving for Singapore under the pretext of fearing for his life. Posing as a victim, he sought help from representatives of several embassies in Bulgaria and Boyko Borissov (then in his first term as prime minister – editor’s note), which the premier confirmed in a TV interview several years later. Prokopiev claimed that his life was in danger because of the publications in his media group Economedia practicing “freedom of speech” and writing against Tsvetan Vassilev.

The real reason for Prokopiev’s hasty relocation to Singapore hides not in the aforementioned articles, but in incurred debt for over BGN 400m that caused him to pledge as collateral even the editorial policy of his publications. The move was a global precedent for a publisher and proved that “freedom of speech” is nothing but a fig leaf for Prokopiev to improve his image with and journalism is just a business for him. It is also telling that he returned to Bulgaria while Tsvetan Vassilev was still in the country and at the helm of CorpBank, more than a year before the scandal with the lender’s collapse blew up. The oligarch’s return coincided with the sale of his mining company Kaolin, the money from which he used to repay a large portion of his debts.

This more recent report that his life is in danger comes at a similar situation. The similarities are uncanny, the mode of operation – the same. According to media reports, the oligarch indicted in the EVN case complained days ago that popular figures from the Movement for Rights and Freedoms (MRF) have “ordered a hit” on him, with the assassination supposed to be carried out by Aleksey Petrov and Hristo Kovachki.

Once again, Prokopiev cites as motivation articles against these individuals published in Capital, the flagship of the Fake News Factory formed around the Economedia outlets. This time, Prokopiev points to “European and NATO values” instead of “freedom of speech” as the trigger. No evidence and actual facts have been submitted, of course, and the report itself resembles more a collection of fake news and sci-fi material.

Just like in 2010, it was not directly filed with investigative authorities, but shared with outside individuals and eventually found its way to Bulgarian law enforcement and judicial system agencies. The Specialised Prosecutor’s Office has opened a preliminary enquiry. Authorities have denied all requests for comment, noting that “the information contained in the report is being looked into”.

The supposed threats against Prokopiev detailed in the surrealistic-sounding report, as people with direct knowledge describe it, concern his physical wellbeing and business interests. Among the targets is presumably his company, currently in the business of renting electric cars in Sofia. The investment is one of the last standing financial lifelines for Prokopiev after the state distrained BGN 200m in assets of his in relation to the privatisation and subsequent sale of Kaolin.

In 2017 Prokopiev launched several business ventures in a bid to generate financial flows to continue to support the political-and-economic-pressure-exerting Capital circle. These include a bitcoin plant and the Spark electric car rental service. The major shareholders in Spark are the Latvian company Ride Share and the Bulgarian eMobility International. Alfa Finance Holding, where a major shareholder is Ivo Prokopiev, partially owns eMobility International.

The blue cars project is a favourite of the oligarch, who has no qualms about mixing his publishing and commercial roles, promoting the vehicles at any and all events attended by foreigners – not only business forums, but journalistic conferences too. But it appears that Prokopiev’s project is not particularly successful, as the last available financial reports of the Bulgarian company show it generates losses at a half-a-million-lev clip annually. And if in 2017 the net loss of the entire cluster of businesses surrounding eMobility International was BGN 480,000, it grew to BGN 979,000 in 2018 with operational expenditure of BGN 1.57m for the year and revenues at only half that amount, the consolidated financial statement shows. At the same time, the business group has BGN 650,000 in loans and leasing liabilities.

The situation with Alfa Finance Holding is even grimmer, according to its financial report. The Commercial Register is yet to provide information on the holding’s 2018 records, but the documentation for 2017 is pretty telling. The company ended the year with a BGN 3.9m loss, scrambling to patch up its finances with short-term loans, which totaled BGN 35.7m for 2017 – or about BGN 4m more than in the previous year – in addition to outstanding interest rate payments of nearly BGN 3m. The unpaid salaries and social security contributions alone stood at BGN 184,000.

Separately, Prokopiev, his spouse Galya and dozens of companies they are involved in are the defendants in a BGN 200m asset forfeiture case filed by the state, although a big chunk of the assets are not even available. The Anti-Corruption Commission for Illegal Assets Forfeiture (ACCIAF) launched a probe into Prokopiev in early 2017 in relation to his EVN charges. He is now indicted in the case alongside Traycho Traykov and Simeon Djankov, former ministers of energy and finance, respectively.

The ACCIAF audit of the companies in the Alfa Finance Holding group revealed numerous violations committed during the privatisation of Kaolin. The assets were distrained after the ACCIAF established a discrepancy of about BGN 200m between Prokopiev’s income and property. In a press conference at the time, the ACCIAF announced that it is targeting 30% of a Sozopol property consisting of a house and two pools. It is the most expensive distrained property of the oligarch.

According to the ACCIAF, it is Kaolin that provided the main source of illegal funding for Prokopiev. The commission believes that he and his brother acquired the company from the state without fulfilling the legal requirements and later syphoned off the business at the expense of the state.

The body of evidence shows that the company has been reporting lesser than actual output for years on end. This way Kaolin was paying much lower taxes and concession fees than it really owed to the state. Due to these financial manipulations Prokopiev was indicted for a second time this year. This time he is charged with money laundering related exactly to Kaolin and the schemes for syphoning off the enterprise.

Because of conflicts with the law and a long list of debts Prokopiev’s reputation abroad was also seriously marred. The oligarch who used to fuel the Capital circle with money earned from EU projects, public procurements and grants is no longer a welcome partner. After the mask of an honorable businessman was torn off him, Prokopiev tried to ensure protection for himself turning to all kinds of foreign NGOs, media and other organisations. However, the only people who still back up his claims that he is a racketeered businessman are his friends from the Reporters without Borders (RSF).

Nevertheless even they saw that there’s no way to present the probes into Prokopiev’s affairs as racketeering on the part of the state. That is why they promote a new argument in his defence: everyone who doesn’t like the candidature of Ivan Geshev for the prosecutor general, will be subjected to harassment. But all probes into the oligarch’s activity started long before the nomination for No.1 prosecutor was made public, so this version seems increasing less viable.

A curious detail in this whole story is the fact that even being indicted and defendant in two cases (EVN and Kaolin) Prokopiev is not banned from travel abroad. It is obvious, though, that he is again packing his suitcases preparing to set sail for Singapore and an indirect proof to that is the fact that in his professional online networks the oligarch mentions as his location the exotic country with which Bulgaria doesn’t even have an agreement for deportation of outlaws and indicted persons.


The exotic rescue plan costs several million USD

Back in 2010, when Prokopiev’s business ran aground he left for Singapore with his family. To settle there a foreigner needs a permanent resident status. The government grants permanent residency to foreign subjects who would invest certain amounts of money in the country. There are three options. The first is to start a new business and invest SGD 1m (or about $740,000) in it. The investment of SGD 1,5m in the expansion of already existing business also gives right for permanent residency. The third option for a foreign citizen is to invest SGD 2m ($1,5m), as 50% of it should be invested in real property. The intrigue behind leaving Bulgaria is also worthy of note.

According to publications in mass media, the Prokopievs passed through the VIP border control as passengers who have diplomatic immunity. As is known, the boss of Capital is an honorary consul of Canada in Bulgaria.

In Singapore Prokopiev lodged himself on 8 Orange Grove Road, a deluxe residential area. The price of an apartment there varies between $1-2 m and, according to brokers’ sites, the rent amounts to SGD 10,000 a month and higher. Each apartment in this complex has at least five rooms and offers to the residents five swimming pools of different size, a barbecue, sauna, gym and spa. These are the lavish extras which the oligarch enjoys while his creditors in Bulgaria are waiting for money.


Prokopiev funds his investments with loans which he doesn’t pay off

By 2012, the noose around Prokopiev’s neck was fastened, after it transpired that he managed to draw loans worth about BGN 400m from five Bulgarian banks and four leasing companies. According to the available data, since then the oligarch who fled to Singapore owes BGN 175,3m to the Bulgarian financial institutions and about BGN 223m to foreign ones. The scheme which enabled him to take the money was one and the same, no matter whether it was used for the purchase of a state-owned enterprise, concession or investment in new business or media project. He makes investment and then bonds it against bank loan. When any of the firms is declared insolvent he sells it out to some offshore company and the creditor is left emptyhanded.

Among the iconic examples of such frauds is the biggest loan worth of € 42,053,062 which Prokopiev drew from a Bulgarian bank. It was drawn in 2011 by Alfa Finance Holding, the key firm in Prokopiev’s financial schemes, as the collateral for it was the Danube industrial park. The loan was drawn for refinancing another loan which, in turn, was taken for the construction of a ro-ro terminal. In experts’ estimation, the construction costs around BGN 10m, in other words, 8 times less. The enterprise in its entirety may be pledged to the bank but its most “appetising” assets were provided as collateral for another loan drawn years earlier from another bank. The collateral payments are still overdue even after the second loan was drawn.

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