Reuters logo
UPDATE 2-Bulgaria seeks to block pension fund sale
July 17, 2013 / 5:42 PM / 4 years ago

UPDATE 2-Bulgaria seeks to block pension fund sale

* Ruling party asks financial watchdog to stop sale

* Vienna Insurance agreed to sell stake to UK company

* Insurer says expects new owner to provide clarity

By Tsvetelia Tsolova

SOFIA, July 17 (Reuters) - Bulgaria’s ruling Socialists have asked the local financial watchdog to halt the planned sale of the country’s biggest private pension fund, Doverie, because of a lack of information about the buyer.

Vienna Insurance Group (VIG) said on Monday it had agreed to sell its 92.5 percent stake in Doverie to UK-based United Capital Plc for an undisclosed sum.

But the deal has sparked concerns in the Balkan country due to a lack of public information about the buyer. Media reports said it was a dormant firm controlled by a string of offshore units, whose ultimate ownership was unclear.

United Capital has no stock market listing and no website. The company is listed in registers of British businesses but only has an mailing address in Essex, eastern England, and no phone number.

Vienna Insurance on Wednesday said it expected the concerns to be answered quickly.

“We assume that the new owners will be able quickly to establish clarity and transparency about the new structure,” a spokesman for the insurer said.

In a statement, released late on Wednesday in Bulgarian language and without a contact line through a Sofia press agency, United Capital said it was a UK-based financial services holding company, which manages assets for over 2 billion euros and has stakes in different insurance companies, real estate funds and banks in several countries.

It said the company will present all the necessary documents required by the Bulgarian authorities for the sale. It also said one of its key investors was Sergei Mastyugin, who is a member of Russia’s Investbank supervisory board.

Doverie has more than 1.25 million contributors in Bulgaria and almost 1.8 billion levs ($1.2 billion) under management.

“This sale should be stopped because of the unclear origin of the capital of the buyer,” senior Socialist deputy Yanaki Stoilov told parliament. “Where we have public funds involved, we shouldn’t allow companies that cannot be controlled by Bulgarian institutions.”

Under the Bulgarian pension system, all workers born after 1959 must enroll in a mandatory scheme and pay 5 percent of their wage to one of nine regulated private pension funds, among which Doverie has the largest share.

The fund’s management board along with its chairwoman, Daniela Petkova, tendered their resignations over a lack of transparency in the sale.

“We have not seen any representative of the new buyer, we do not know anything about it, about its key activities or capital, nor has this company carried out due diligence,” Petkova told Reuters.

One of the smaller shareholders in the pension fund, Bulgaria’s trade union CITUB, has also expressed concerns that the deal could put at risk the pension system and the savings of many in the European Union’s poorest country.

Stoyan Mavrodiev, head regulator at the Financial Supervision Commission, told parliament his institution would check the necessary data but had yet to receive any documents on the sale.

“I want to assure you that we will in no way allow (a purchase by) companies that do not meet the regulatory criteria for transparency, solvency and competence,” Mavrodiev said.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below