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Beating all records in the EU, Bulgaria has been experiencing non-stop anti-government protests since June. The political tensions have put additional pressure on the country's public institutions. In an interview granted to Europolitics, Stoyan Mavrodiev, the 43-year-old head of the Financial Supervision Commission (FSC) that regulates the non-banking financial sector, says that corporations attack the FSC to promote their business interests. Mavrodiev is also sceptical about the sale of Bulgaria's biggest private pension funds by Austria's VIG to a UK post box company for a rumoured 150 million.

Bulgarians have little or no confidence in the way corporations operate in their country. Polls show that they trust the EU institutions, but have no confidence in the Bulgarian authorities when it comes to the enforcement of transparency and rule of law in the economy. Are they wrong?

In the financial sector, we already have a very high level of transparency. Bulgaria's legislation in that respect has been completely overhauled in the last years. The Financial Supervision Commission imposes a high standard on private companies listed on the stock exchange. The Central Bank is doing the same with the private banks in the country. For this reason, Bulgaria's banking sector is in a very good shape. We did not have to deal with bankruptcies during the global financial crisis. In a way, because the financial sector is so consolidated, it is no suprise that we have some strong players with considerable market shares, like UniCredit Bulbank, for example.

But how do you explain the Bulgarian citizens' mistrust of corporations?

Nowadays, there are several things Bulgarians do not trust. They don't trust the politicians, to start with, because they feel they have been cheated over the past 20 years of transition from Communism to market economy. And they don't trust most of the influential Bulgarian businessmen because - they believe - that the latter have become rich by using unfair methods.

Again: are they wrong?

No, they are not wrong. Bulgarians have been deceived by many of the parties that have ruled the country over the past years. They kept promising to implement structural reforms and improve living standards - but they failed to deliver.

Does this apply to your own party, the Citizens for European Development of Bulgaria (GERB), as well?

I was one of the main critics of former Finance Minister Simeon Djankov (2009-2013), as it is well known in Bulgaria. There were no reforms in the health sector - which is on the verge of collapse now - or in the pension system or in public administration. The finance minister was a non-reformer - he implemented austerity measures only. This was the main reason why the government of Boyko Borisov fell in February and lost the chance to secure a majority again. Nothing will change unless the politicians pass laws that tackle the problems of transparency and of concentration in the business sector. People will protest against any government now.

There is increasing rivalry in Bulgaria's business circles. How do these tensions impact on the FSC's work?

We have highly concentrated corporate media groups in the country, which try to influence politics as well as the different public institutions, including the FSC. I recently made public statements about one of these groups, Economedia, and its majority owner, Ivo Prokopiev. We have many court cases pending against his group - but there are other such judicial procedures as well. Stories appear in the Bulgarian media that are simply untrue. their aim is to manipulate the citizens because these corporate groups are not happy with the FSC's decisions. Most of their operations on the capital market are supervised by our commission.

I think this is a quite dangerous development. There should be a red line, a clear separation between legitimate business interests and unethical behaviour that aims at ruining institutions by churning out such stories.

The sale of Bulgaria's biggest private pension fund, Doverie, by the majority holder Austrian Vienna Insurance Group (VIG) has elicited an outrage in the country. The buyer is a UK-registered post box company. Billions of leva of Bulgarian pensioners are at risk, the president has warned. Is his assessment correct?

For two months now we have only seen a press release published by the VIG on its website regarding this sale, but not single page of an official document. That is unusual, to say the least. We assume that the VIG will urge the buyer, the UK-based United Capital PLC, to file an application for a licence so that the Financial Supervision Commission can start the auditing process. The reputation of the VIG as a serious international company is also at stake here.

Of course, I'm also familiar with the investigative media reports about United Capital. It does not look good to me as a citizen. But in my capacity as the financial supervisor, I cannot make judgements based on media reports. We do not want to - and will not - compromise on the quality of the investor. We will very thoroughly investigate United Capital's sources of income, the legitimacy of its funds and the group's prior experience. It may be dangerous for the whole financial system here, if we were to approve a deal without really knowing who the owner of the company is. Some 1.25 million Bulgarian citizens have insurance contributions in Doverie, worth around two billion leva (1.02 billion).
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Publication:European Report
Date:Sep 24, 2013
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