Prokopiev pumped millions from Kaolin into his media outlets
Offshore companies and undeclared money feed the Fake News Factory
12 January, 2018
Offshore companies, undeclared funds and capital flows running against all rules of operating companies traded on the stock exchange lay the financial foundations of the oligarchy's Fake News Factory. This was revealed by the newswire Monitor Agency's investigation into the source of the funds backing the media outlets of the slandering factory created by Ivo Prokopiev's Capital group and supported in its mission by the publications of the other members of the oligarchic clique - Tsvetan Vassilev, Ognyan Donev and Sasho Donchev.
Just days ago, the Factory fired its latest salvo of manipulations - this time with a massive campaign of articles in foreign media outlets that parrot one of its false talking points alleging that the members of our media group - Telegraph, Monitor, Politika and Monitor Agency were the biggest beneficiaries of EU funding allocated for journalism. Data about who receives money from the EU and the state is public domain, and the fact that the media group has not gotten a single euro from the EU funds is easily verifiable by a simple check. Such a check would also show that these lies are being disseminated because our publisher, lawmaker Delyan Peevski, is the main enemy of the Fake News Factory because of the legislative initiatives he and some of his fellow party members introduced in a bid to illuminate the truth about CorpBank's collapse and stop the secondary plunder of the bank's assets. Not to mention that his media outlets are constantly producing revelations about the oligarchs who drained our and our country's resources. But the Factory is trying to pull wool over the eyes of the Bulgarian and European societies by having its mentors and pawns crying thief in order to deflect attention from the real perpetrators of the crimes. This is easily revealed by a simple visit to the national registers. It shows that the pillars of the slandering machine not only received close to BGN 1m from the EU but also that the EU funding is the only money with absolutely transparent origin. Everything else is in the financial twilight zone.
The money flows with unclear sources produce clues to the “rescue operation” with which oligarch Ivo Prokopiev got, at least on paper, his precious Economedia out of the financial morass. The company is of particular importance due to the fact that it owns his media outlets. The operation was conducted at the end of 2012, after the year saw two major business events for Prokopiev. First, in November, the Greek Alpha Bank took legal action on its claim on Economedia, pledged in the lender's favour as collateral, on grounds of arrears on a huge loan extended to the media group. By the way, the loan agreement signed between the lender and the oligarch is sure to be studied in the future as a classic example of Prokopiev's cavalier treatment of journalism as a commodity for sale simply because, along with his employees' desks and computers, he also put up as collateral the editorial policy of his media outlets. In an attempt to escape his creditors and continue to control Economedia, a month later, Prokopiev finalised a deal for the sale of Kaolin - the generous gift of the Kostov's privatisation that he got for cents on the dollar in the beginning of the century. This second event helped the oligarch, a self-proclaimed master of entrepreneurship, pour some of the money from the sale of Kaolin into Economedia and so extricate it from Alpha Bank's claim. The exact sum is €5,851,700, or BGN 11.4m. The money came from the sale of Kaolin to the German Quarzwerke Group and is part of the sale proceeds that went to the accounts of another masterfully created company of the oligarch - Alpha Finance Holding. The latter invested the huge amount in Economedia, with the spectacular moment marked not only with a loan agreement between the two sides but also with a special statement that was disseminated by Prokopiev's media outlets. It explicitly said that the oligarch sold his golden goose and, at the same time, repaid his debt to the Greek bank. The source of the money used to repay the loans, however, is not named outright, and it is because such a deal goes against all regulations. The reason is that at the time Alpha Finance was listed on the stock exchange and every decision regarding such a loan requires a decision by the company shareholders. Such a decision, if it exists, was neither filed with the Commercial Register nor disclosed to the stock exchange. However, something else becomes evident when analysing Alpha Finance Holding - the company owed BGN 164m to banks at the time, but instead of using the revenues from the sale of Kaolin to repay some of the debt, it gave not a small chunk of it to Prokopiev, so he can save Economedia from the financial collapse he personally caused. Moreover, according to the same documents, Prokopiev as a natural person owes Alpha Finance Holding BGN 2.5m, putting his own self under the “affiliated firm” category as a way of describing the loan.
The shady deals do not stop here. Several months after Alpha Finance Holding extended a loan to Economedia, in April 2013, it transferred part of its claim to another firm owned by Prokopiev - Investment Information Agency (IIA). The motives behind this move will become clear at the end of 2013, when IIA participated with the same amount, BGN 1.4m, in the capital increase of Economedia, merging with the media group. The same scheme was utilised with another company affiliated with Prokopiev and his partner Teodor Zahov, the other shareholder of Economedia. If the scheme sounds familiar to you, it is no coincidence - it was how CorpBank's capital was increased through firms affiliated with Tsvetan Vassilev using money from the lender. The reason for the scheme to be implemented in the first place, probably lies in the regulations for companies being traded on the stock exchange. Most likely these restrictions, put in place to provide complete transparency for all financial flows, are precisely the reason why in 2016 Alpha Finance Holding gave up selling its shares on the stock exchange. But because it was not something they could admit, they tried to shift the responsibility for the decision onto the Financial Supervision Commission, accusing it of exerting pressure. This is the standard manipulative approach employed by these people to this day, whenever they are caught in a wrongdoing.
The situation is not much better with the smaller cogs of the Fake News Factory. For example, an investigation into the funding sources of Transmedia, set up after the fugitive banker Tsvetan Vassilev fled Bulgaria, shows that it is a subsidiary of an offshore company registered in Dubai.
The website is a platform for Miroslav Ivanov, the Bulgarian Madoff's personal hired pen. The website, which was created in 2015 - at the height of the secondary plunder of assets bought with CorpBank money, conducted by Vassilev and his cronies - at least on paper is owned by Studia Transmedia. It, in turn, is fully owned by Universal Bulgarian Investments held by Svishtov Winery. If you wonder about the owner of the winery, it is a company registered in Dubai whose representative in Bulgaria is the businessman with Swiss passport Georgi Vassilev, who passes himself off as an investment banker. He is the founder of the Republic BG party, which is directly connected to the circle surrounding political analyst Ivan Krastev, the control centre for the talking points circulated and recycled by the Fake News Factory.
Just a few months ago, an offshore company could easily be seen standing behind Bivol, another major weapon of the slander machine. The company is owned by Alberta Alkalay, the significant other of the self-proclaimed investigative journalist Asen Yordanov. Until April 2017, each of the couple controlled 50% of the shares in Bivol, with Alkalay controlling not only half of the company publishing the eponymous website but also the entirety of Image Advertising. The advertising agency through which, as Monitor Agency revealed over a year ago, the two indulged in racketeering of mayors along the Black Sea coastline, and which is officially owned by the offshore company Ideas for Young Image, established in Washington. Obviously, once the scheme was exposed, the two decided to cover up the tracks of the shady funding, because Alkalay sold to Yordanov her share in Bivol for the “massive amount” of BGN 2,500 and now he is the sole owner.
The national registers also show that Yordanov, at least on paper, should be the only one whose social insurance is covered by the company. According to the DAXY system for company investigation, Bivol officially pays contributions for only one person. Interestingly enough, according to its financial reports, the outlays for salaries and social security contributions are zero. Meanwhile, at least four people claim to write for the website - Asen Yordanov, Atanas Chobanov and two more authors. It is up to the relevant institutions within whose competence it is to investigate financial crimes to find out what the truth is. Bivol is not the only website in the Fake News Factory with glaring discrepancy between reality and financial reports. The situation is even more staggering in the case of Mediapool, which officially employed between two and three people in the last two financial years on which we have data (2015 and 2016) and spent a total of BGN 25,000 for their salaries in that period. This translates as BGN 389 a month for each of the three employees, which is the mandatory minimum for the profession. At the same time, on its website Mediapool claims that its team consists of 11 people. Where the money for those people's salaries come from, and do they pay taxes and social security contributions on this income, remains unclear. One of the possible explanations for such phenomena is that the company operates with undeclared funds.
A similar situation is observed in another website linked to the indicted banker Tsvetan Vassilev - Frognews owned by former State Security agent Ognyan Stefanov. According to official data, there are seven people on its payroll, but the annual expenses for salaries and social security contributions do not exceed BGN 50,000. In other words, the employees receive a little over the country's minimum salary and far less than the average cleaning lady of a night club.