Revealing the ownership of offshore companies in Bulgaria – Mission impossible

From February 1 to May 31, 2019, the actual owners of companies with foreign participation in Bulgaria had to be declared. By the end of 2020, 17,704 companies had filed declarations, with the beneficial owners of 16,686 companies registered. But some of the firms have apparently not declared their true owner or their true owners, and “straw persons” have been named instead. This is clear from an analysis of the data published by the Registry Agency in the Government’s Open Data Portal.

The clarification of the ownership of companies through the LMML took place not on the initiative of our legislators, but because of the mandatory implementation of the 5th European Anti-Money Laundering Directive, which provides for the introduction of public registers of the ultimate owners of companies in all Member States. The directive was a European response to the scandal caused by the loud journalistic investigation “Panama Papers” by the International Consortium of Investigative Journalists ICIJ. National governments were given a deadline of the end of January 2020 to introduce such registers. Nevertheless, Britain has promised to introduce property registers in its most secret overseas territories such as the British Virgin Islands and the Cayman Islands. For them, the deadline is 2023.

According to the adopted in Bulgaria Law on Measures against Money Laundering (MAMLA), each company had to submit to the Commercial Register a declaration form identifying the natural persons behind it. In the Commercial Register it is marked as form B7. By the end of 2020, such declarations had been submitted by 17,704 companies. A declaration of beneficial ownership must also be submitted each time ownership changes.

The declaration also identifies representatives of offshore companies, foreign legal entities with direct or indirect control, as well as contact persons in Bulgaria. The latter are most often lawyers performing services in the preparation of documents and entries in the Commercial Register.

Form B7 must be submitted if the company has an owner or partner who is a legal entity and owns at least 25% of the company’s capital. This, of course, is not necessary for sole traders or for OOD, in which the owners of the shares are individuals. For joint-stock companies are declared final owners of legal entities that hold more than 25% of the shares.

The Bulgarian register: “dark India” for foreigners

If you do not speak written Bulgarian, the chances of finding the ultimate owner of a company in the Commercial Register are very small. And this is not only because of the fact that the interface of the Registry Agency proudly advertises only Bulgarian as an opportunity.

The problem is that searching by name of the ultimate owner in the Commercial Register is not possible, as by the way it is not possible to search with the official transliteration in Latin of Bulgarian companies. But this is also the case in other registers of EU Member States.

However, open data allows to create applications and search engines that fix this defect. In the application of the BRRD, it is now possible to search with the parameters for a declaration of beneficial ownership (B7_ActualOwner), combined with the Latin name of the foreign company, or with its legal form (Ltd. Limited, LLC, SA, etc.).

It can also be searched by a three-letter iso-country code . For example, DEU for Germany, FRA for France, VGB for British Virgin Islands, MHL for the Marshall Islands, SYC for Seychelles, etc. Entry of the original names of individuals is not provided and if you search, for example, Charles Clavreul from Ciments Français – the company behind Devnya Cement, you will not find it. You should know that in Bulgarian he is written Charles Clavreuille.

Strawmen, Georgios and Girardelli

Some of our well-known businessmen are listed as beneficial owners in a large number of companies. For example, Kiril Domuschiev, the Bobokov brothers, Ivo Prokopiev, Sasho Donchev, Ognyan Donev and even Vasil Bojkov. Others, who have long been known to control large assets through offshore companies, have not recorded such circumstances. Among them are Nikolay Banev, Delyan Peevski, Ivo Kamenov and Marin Mitev (TIM) and Vetko Arabadzhiev.

The practice of declaring obvious strawmen or “straw people” to be owners continues. Apparently, the stakes are such that the real owners prefer to take the risk of paying the huge monetary penalties provided for under the LMML if they are one day revealed.

Indeed, the Penal Code provides for imprisonment for declaring false data in an official document, but after the case of Hristo Bisserov hardly anyone worries that he will fall under prosecutorial fire because of such a trifle. That is why dozens of citizens and residents from countries such as Seychelles, Belize, Jersey, the Isle of Man, Dubai, Sri Lanka and even two from St. Vincent and the Grenadines have borne the heavy responsibility of business owners in our country.

The already famous Georgios Georgiou, who, according to an investigation by Bivol, appeared in dozens of companies credited by First Investment Bank, has already shrunk his activities to only 7 Bulgarian companies, in which, however, he himself is not the owner, but is only a representative of an offshore company. Georgios ceded his property to Pradeep Perera of Sri Lanka.

To the delight of Luxembourg-based Marc Girardelli, his ownership of Ulen is now fully officialized. Georgios Georgiou has transferred to him 87.8% of the shares he held through the offshore company T.A.K. Services Limited. The remaining 12% belongs to Lenia Papadopoulou, sister to Georgios from Cyprus. In the past, it was much more popular among registrars of companies with hidden owners, but at the moment it is left only with its participation in Yulen.

Cyprus, however, remains a generous reservoir of straw people with 535 “beneficial owners ” hits . Cypriots own the district heating companies in Pernik, Gabrovo, Veliko Tarnovo and Vratsa.

District heating is a good example of using strawmen to conceal the real owner. TPP-Bobov Dol is owned by a certain Erlin May Rodriguez from Belize. David Fordham of Yorkshire is fluent in Brickell. At the venerable age of 81, he hardly remembers that he owes the Bulgarian treasury over BGN 38 million. His Yorkshire neighbor Elizabeth Clair Ulham owns the thermal power plants in Ruse and Pleven.

What all these Cypriots, British, Belizeans and scandals about the burning of garbage and the huge debts to the treasury of the above heating companies have in common is the “energy consultant” Hristo Kovachki, described in the reports of the US ambassadors as an “energy mobster”. He has declared himself as the actual owner of several companies, the most significant being the Pension Insurance Company “Toplja” and the insurer “OZK Insurance”.

The latter company resorted to the legal services as a legal adviser to Detelina Hancheva – the woman to the Prosecutor General Ivan Geshev. This suggests that no one will hold Kovachki accountable for anything, let alone for trifles such as declaring false circumstances (up to 3 years in prison under the Penal Code) and complicating the international situation in the Commercial Register.

Application:

Keywords for searching for offshore property according to nomenclature in the open data of the Registry Agency:

ActualOwners
OffshoreIdentifier
OffshoreDirectControlCompanies
OffshoreDirectControlCompanyRepresentatives
OffshoreNoDirectControlCompanies
OffshoreNoDirectControlCompanyRepresentatives
ContactPerson550a
OffshoreCompany
OffshoreSeat
OffshoreRepresentatives
OffshoreTransliteration
OffshoreWayOfRepresentation

Three-letter country codes here

You can combine keywords with company names, persons, and country code in your search.

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За да научавате преди всички за нови разследвания, инсталирайте си нашето мобилно приложение:

Щом сте стигнали дотук, вероятно вече си задавате въпроса как се финансира този журналистически проект.

От създаването си BIRD се финансираше от подаяния в нашето журналистическо чекмедже.
Но на чекмеджето му мина времето. Даже прокуратурата затвори онова Чекмедже, знаете кое…
Нашето финансиране влиза в крак с епохата. Фондонабиращата ни кампания вече се казва

#МятайСБЪРД

Дарявай за BIRD и мятай павета в блатото с корумпирани политици и други тарикати.
Те тайно премятат пари от твоя джоб в своя. Те размятат безнаказано лукса си пред очите на всички. Няма кой да ги накаже ако се надяваш на държавата.
Мятай, за да ги накажеш ти. Да дариш за разследващите журналисти е гаранция, че гадостите, с които силните на деня те замерят, ще им се върнат.
Можеш да метнеш веднъж, за да ти олекне!
Но по-добре е да мяташ редовно всеки месец и да се чувстваш трайно удовлетворен.
А най-добре е да доведеш приятели и да мятаме редовно заедно в екип. С мощен залп!
*За кръстник на новата ни фондонабираща кампания избрахме другарката Ваня. Благодарим й за вдъхновението!