Bulgarian nightmare of VTB Bank

For more than six months VTB can not come into the ownership of the largest telecommunications operator in Bulgaria Vivacom because of a questionable purchase scheme.
Despite the fact that the shares Vivacom were pledged to VTB Capital plc, the top managers of VTB again issued a new loan to buy the same shares. And in fact Soloviev & Co issued a credit to themselves,or rather their own Viva Telecom company from Luxembourg. But ultimately, at the end of August 2016, "VTB Capital" closed a deal to sell the largest Bulgarian telecom brand, selling INTERV - the holding company of BTC - to a consortium of buyers. The consortium, which acquired Vivacom for 330 million euros, accounted for a Bulgarian businessman Spas Rusev, VTB and managers of the Bulgarian office of the bank Milen Velchev and Georgi Velchev, who is responsible for the auction in November 2015. Moreover, even the leading business publications like Vedomosti noted something suspicious when buyers consortium acquired the company BTC, operating under the brand name of Vivacom, using the money of VTB itself.

But in February 2016 the two companies - Empreno (BVI) and LICT (Luxembourg) - owned by Russian businessman Dmitry Kosarev, filed a lawsuit against VTB Capital plc for «the illegal capture and sale» of Vivacom tot he affiliate side. So it turns out that the bank with state capital, VTB, granted a loan without collateral, because at the time of closing all the decision-makers were clearly aware that the shares of BTC are under arrest, and therefore can not serve as collateral. This means that the transaction was carried out with the shares in custody, it will be considered null and void, that is, not having any value.

VTB problems on the pages of Bulgarian media

Bulgarian media talk in detail about the problems of VTB, whose representatives can not fully take the ownership, entangled in the intricacies of questionable transactions. Thus, Telegraph details the situation, explaining that attempts of InterV were blocked by two companies - Empreno headed by Dmitry Kosarev and LIC Telecomunlcactions, registered in Luxembourg.

Transmedia in its article under the title "The new investor has a market solution to the problem with BTC:: "Universal Investment Advisory (a Swiss company) said that BTC has become the object of sale in the notoriously incorrect procedure, organized by the creditor - Russian VTB".

"As a result, serious investors refused to participate in the auction for BTC, and the participants were only two persons with speculative interests. This narrowed the competition, and, accordingly, reduced the price to a minimum limit. "Such actions are in direct conflict with the Bulgarian national interests, as well as with the law", says a letter of the Swiss company", explains Transmedia.

It also cites the findings of experts from Universal Investment Advisory, which "among the problems associated with BTC, raise questions about only one of the declared owners", Spas Rusev, who not only do not have the necessary funds, but has no experience in managing a company of this magnitude. According to the investor's opinion, in this regard, there is a reasonable question - "whether in fact the main creditor represented by VTB is a genuine new owner, or actually there's an unknown third person."

"Unclear ownership is a risk factor, since BTC provides telecommunications services to government agencies," emphasizes Transmedia. Buffalo reports that the nominal owner of Spas Rusev and VTB hide behind Proxy Keimpe Reytsma, director of Period (Luxembourg), related to Yuri Ivanyushchenko, Ukrainian deputy of the Verkhovna Rada, which is wanted by Interpol. Buffalo recounts attempts of Reytsma to influence the Bulgarian courts.

The author quips as Keympe Reytsma forgets to mention that Empreno Ventures successfully challenged the results of the auction in 2015 in the English courts and won a number of cases against VTB. "Keympe Reytsma forgets to point out that at the auction in 2015 Spas Rusev and VTB tried to buy BTC for 30% of the real value, and thus caused damage to the Bulgarian state to hundreds of millions of euros" - sums up Buffalo.

In conclusion, we have to admit that all the current problems of VTB were evident even at the stage of processing the transaction with Vivacom. Russian media have written extensively about the dubious scheme, and businessman Dmitry Kosarev in an open letter to Prime Minister Dmitry Medvedev, actually listed the negative consequences for the bank and the state as a whole.
As a result of the transaction, questionable from a legal point of view, VTB top managers were instructed to allocate a loan to buy a company whose 100% of the shares at that time were the subjects of claims in the courts of Bulgaria, Great Britain and Luxembourg. Of course, top managers headed by Yuri Soloviev were well aware that it was from the beginning a troubled credit. In other words, they approved the non-market transaction.

Therefore, we can expect that in the near future the law enforcement agencies will closely investigate all the details of this black deal, which resulted in VTB top managers pumping 240 million as a non-return loan, and the bank now faces the risk to lose another 350 million euro in the EU courts. To say nothing about the fact that the scandalous scheme with Vivacom hit and still hits Russia's financial image.