May 11, 2018 / 12:23 PM / 15 days ago

Bulgaria charges two Corpbank supervisors with mismanagement

SOFIA (Reuters) - Bulgarian prosecutors have charged two supervisors of bankrupt Corporate Commercial Bank (Corpbank) with alleged deliberate mismanagement, the Sofia City Court said on Friday.

FILE PHOTO: A general view of the main office of Bulgaria's Corporate Commercial Bank (Corpbank) in Sofia November 6, 2014. REUTERS/Stoyan Nenov

The court said Elena Kostadincheva and Stanislav Lyutov were charged with alleged intentional failure to properly manage and protect the property in their care between August 20 and November 6 2014, which resulted in a loss of more than 1 million levs (450,108 pounds) to the Bulgarian Deposit Insurance Fund.

Kostadincheva and Lyutov were not immediately available for comment.

The two were “conservators” of Corpbank, who were appointed by the central bank to supervise Corbank, with the right to inspect all its operations.

Corpbank went bankrupt in 2014 after a run on deposits and an international audit showing two thirds of its assets had to be written off due to major failings in the way the bank was run. This triggered the biggest banking crisis in the European Union member country since the 1990s.

Last year, Bulgarian prosecutors said they had indicted the main shareholder of Corpbank Tsvetan Vassilev, two former deputy central bank governors and others over the demise of the Balkan country’s fourth largest lender.

Vassilev has repeatedly denied any wrongdoing and blamed Corpbank’s collapse on a plot hatched by business rivals.

The collapse badly hurt confidence in the banking system and its regulation, prompting the central bank, under a new governor, to tighten supervision rules and carry out an asset quality review of all lenders.

Reporting by Angel Krasimirov. Editing by Jane Merriman

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