“Circumstances for possible crime”, or how to loose of stubbornness

  • A court decision of 2010 returns to Dryanovo Municipality privatized properties for violated contract
  • For nine years later, the city mayor refuses to act them as municipal property
  • All this time, the former property owners continue to rent them out
Although the contract for the sale of this building has been dis
solved
by the court, the Municipality of Dryanovo refuses to take possession of this massive four-storey building
Photo: Emilia Dimitrova – Dankova

On February 13th, the District Prosecutor’s Office – Gabrovo sent to the Specialized Prosecutor’s Office a case file containing “circumstances for possible crime” under Art. 219 of the Criminal Code, performed by the Mayor of Dryanovo Miroslav Semov. The text indicated, refers to abeyance of official that is leading to dissolution of property and lack of control over the work of employees responsible for public property. The punishment provided for in these cases is imprisonment of two to eight years or fine of up to BGN 5,000.

The case file at the Gabrovo Prosecutor’s Office was formed on a signal submitted at the beginning of February 2019 by Trifon Panchev – resident of Dryanovo and MP Christina Sidorova (BSP). With the signal, both of them want the prosecutor to determine whether the mayor Miroslav Semov has neglected the obligation to return to the municipality the buildings in the center of Dryanovo, that are subject of privatization deal subsequently announced by the court for null and void. Although nine years have passed since then, the Municipality of Dryanovo didn’t take any steps to enter into possession of its property, according to the signal sent to the prosecutor’s office. According to Panchev and Sidorova, the inaction of the municipal administration has damaged the Municipality of Dryanovo with BGN hundreds of thousands.

Proprietor without property

For nine years, premises in the buildings, the owner of which should be Dryanovo Municipality, are leased by a private company and not a single penny is received in the budget of Dryanovo. The company is “Sidra Group” Ltd. The company was registered in June 2009 with address of management in Sofia and subject of activity “trade, tourism, hotels, restaurants and any other activity not prohibited by law”. Partners in it are Tsvetozar Velchev and Evtim Nikolov and both of them are also registered as managers of the company. Upon its founding, “Sidra Group” had a capital of BGN 119,000, paid as a non-monetary contribution. It is about: two massive municipal buildings, built in 1968 and 1974 and then intended to be used as an enterprise rendering everyday services to the citizens; adjacent to one of them is a plot of 640 sq. m, a transformer station, described as one-storey semi-underground building and another plot of 650 sq.m. The value of all this was estimated by an expert to be BGN 119,000. The company has no relations with the local municipality, at least on paper. But its owners do have.

Through privatization to investments and jobs

Tsvetozar Velchev and Evtim Nikolov, now partners and managers of “Sidra Group”, are former partners in another company – “Abko Commerce”. With this company, on March 14, 2003, the municipal council in Dryanovo signed a privatization contract for ready-to-wear workshop – a separate part of the property of the sole-proprietor Dryanovo company “Boby Denchev”. The purpose of the privatization, written in the contract, is “investments, production and trade activity and not to liquidate, close or freeze the main activities carried out in the property”. The value of the deal was BGN 151,000. With BGN 136,000 of them, the buyer was obliged to repay liabilities of the former enterprise to the National Social Security Institute, so in practice the Municipality received only BGN 15,800.

Although the contract for the sale of this building has been dissolved by the court, the Municipality of Dryanovo refuses to take possession of this massive four-storey building
Photo: Emilia Dimitrova – Dankova

There are two restrictions on the buyer in the privatization contract. For a period of five years, he has no right to transfer belongings and property subject to the deal. For the same period, the rights and obligations under the contract may not be transferred to a third party without the written consent of the Municipal Council in Dryanovo. With the same contract, “Abko Commerce” undertakes to invest BGN 152,000 for 5 years in the buildings in which there was a tailoring production, and to keep a certain number of workers according to a plan for employment that is integral part of the privatization contract.

By signing this contract, “Abco Commerce” also undertake to present annually in the Municipality of Dryanovo written reports on the investments made and the number of open jobs.

Commitments on paper

In 2003, when “Abko Commerce” acquired the tailoring workshop, there were 84 workers working in the workshop – it became clear from a court expertise appointed in 2008. The expertise finds that five years later the average size of the company is three people and the investments are nearly BGN 45,000 instead of the agreed BGN 152,000.

The appointed expertise finds out also that the ban on transfer of the property subject to the privatization deal was also not observed. In November 2005, the property entered as a non-cash contribution to the newly formed “Sidra Group”. In this company partners are “Abko Commerce” and its two owners until then – Tsvetozar Velchev and Evtim Nikolov. At the same time, “Abko Commerce” has already been transferred to the British citizen Marcus Heath. With the sale-and-purchase agreement, he is also the owner of the land subject to the 2003 privatization deal.

The municipality of Dryanovo was not informed of any of these deals, which is why in 2008, the then mayor Ivan Nikolov filed a lawsuit for dissolution of the privatization contract with “Abko Commerce”. The case ends with a final decision in favor of the local administration in Dryanovo on March 24, 2010, of Veliko Tarnovo Court of Appeal.

A court decision?

Nine years later, the buildings privatized by “Abko Commerce” are listed for sale by “Sidra Group”. The announced price for one property is EUR 180,000 and for the other – EUR 250,000. It is for the same real estates valued by an expert at BGN 119,000 with which the owners of “Abko Commerce” founded “Sidra Group” and which was sold by Municipality Dryanovo in 2003 for BGN 150,000. The premisies in the same buildings are currently rented for offices, shops and production purposes, but nothing collected from the rents enters into Dryanovo’s budget. Because the landlord is “Sidra Group” although according to the court decision of 24 March 2010 their owner should be Dryanovo Municipality.

The decree of the Gabrovo Prosecutor’s Office,
by which the case file concerning the privatization transaction of Dryanovo Municipality was forwarded to the Specialized Prosecutor’s Office.
Illustration: “Pro Veritas”

“Municipality of Dryanovo is not currently legitimate as the owner of the property”, the Mayor Miroslav Semov writes in response to “Application for access to public information”, filed by a citizen of Dryanovo in early 2019. According to Semov, “Sidra Group” is not a party to the privatization contract of 2003 /n.b. of editor – the party is “Abko Commerce”, whose then owners are now owners of “Sidra Group”/. Moreover, in the application by which the former mayor wanted the dissolution of the privatization contract, no claims were made for the property of the municipality, which is why it was not pronounced in the court decision. With these arguments, Semov refuses to accept and to act again the property as municipal.

The loser

The extent to which Senov’s arguments will withstand a check by the Prosecutor’s Office will become clear after its conclusion. It will then be clear whether the municipality of Dryanovo owns the buildings it has sold under a contract declared by the court as null and void. Because the Mayor Semov may be right – the company that is the owner of the former municipal real estate has nothing to do with Dryanovo municipality. And then who controls transactions made by the same persons but through different companies?

One thing is clear – the losses are for the budget and for the citizens of Dryanovo.

 

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