Former CEO of TC-IME AD Teodora Taneva faces 74 million EUR claim as Veltchev's plan to illegally acquire BTC collapses

The former CEO of TC-IME AD Mrs. Teodora Taneva, who illegally continues to hold office and signs documents in breach of her legal and fiduciary obligations, has received a statement of claim for 74 million EUR filed with Sofia City Court from the shareholder who dismissed her some years ago.

Mr. Dmitry Kosarev, the owner of the company Empreno Ventures Ltd., who ultimately controls BTC, had initiated various litigation and arbitration proceedings against VTB in London, Vienna, Luxemburg and Moscow, as VTB continues to illegally retain 33% of BTC.

Milen Veltchev's plan to acquire BTC at a third of its market value is stuck in several legal disputes, which now continue with this fresh case filed in Sofia.

«Mrs. Taneva's behavior and actions directly harm the interest of the shareholders and ultimately – the interest of the Bulgarian State, and are subject to civil and criminal liability», says Mr. Kosarev. «We are determined to defend our interest as shareholders and will not allow a former manager to harm us in breaching every essential fiduciary duty and act blatantly against the interest of the company».

Despite of the valid corporate decisions for her dismissal as a CEO of TC-IME AD, Mrs. Taneva continued to sign documents in breach of her duties and against the interest of the company, and will be held liable. Similarly Mr. Milen Veltchev has engaged personal legal representatives in the ongoing case before the High Court of England and Wales related to the fraudulent plan for the takeover of BTC from VTB.

The first hearing of the Taneva civil liability case is about to be scheduled by the Sofia City Court in the coming days.


The Evening Standard Covers Empreno's Legal Action against VTBC

UK subsidiary of Russian State Bank VTB reported to Serious Fraud Office over Vivacom sale

Principle shareholder in Vivacom suing VTB Capital for over $160m

The owner of the largest Bulgarian telecommunications company Vivacom has reported VTB Capital, the UK arm of the state owned Russian bank, to the Serious Fraud Office for the alleged illegal seizure and sale of the company to a connected party.

The criminal complaint was filed with the Serious Fraud Office on Friday by lawyers representing Empreno and LICT and their owner Dmitry Kosarev, who is the principle shareholder in Vivacom.

In a separate legal action Mr Kosarev is suing VTB Capital in London for damages in excess of 143m euros for allegedly selling Vivacom for a price that significantly under represented the true value of the company.

According to the SFO complaint, VTB Capital dishonestly seized LICT’s shareholding in InterV Investment Sarl (InterV), a parent company of Vivacom, by conspiring with a third party to block the owners’ access to the company. Individuals named in the SFO complaint include Mr Nick Hutt (CEO of VTB Capital plc), Mr Alexei Yakovitsky (Global CEO of VTB Capital and CEO of VTB Capital Holding (Russia)) and Mr Yuri Soloviev (Deputy Chairman of the Management Board of JSC VTB Bank and Chairman of the Board of Directors of VTB Capital Holding (Russia)).

After effectively taking control of the company, VTB has quickly started the process of selling it to an affiliated party at a grossly undervalued price, thereby resulting in substantial financial detriment to the rightful owners.

Vivacom is the largest telecommunications company in Bulgaria and a former state-owned monopoly. It employs over 3,500 people and offers various telecommunication services, including fixed-line, mobile, internet, radio and TV broadcasting, and data transmission services. The company is headquartered in Sofia, Bulgaria.

The SFO complaint alleges that VTB Capital deliberately prevented InterV from refinancing a 150m euro loan with the investment bank. It then allegedly sold InterV’s shares in Vivacom, which had been used as security on the loan, at a knock down price to a connected party – and in doing so breached a stand-still agreement.

VTB Capital made an attempt to sell the share of the company to an affiliated individual, Spas Rusev, a prominent Bulgarian businessman. Mr Kosarev believes that the sale is being conducted via a sham auction process without proper notification and in an effort to conceal the sale while blocking other bidders and ensuring that Spas Rusev is able to get the company far below market value.

According to the filing with the Serious Fraud office:

- No proper or sufficient attempts were made to publicise the purported auction so as to attract a reasonable number of interested bidders

- VTB Capital specifically and persistently refused to provide Empreno and LICT with information to enable it to refinance their loans with VTB Capital and to participate in a bid for the InterV shares.

- No proper or sufficient period of notice was allowed before the purported auction to enable interested bidders to prepare and carry out reasonable due diligence.

- The winning bidder, Spas Rusev, is a connected party and a long-standing associate of VTB Capital.

- The ultimate sale price of €330 million agreed for the InterV shares grossly undervalued the shares and represented a substantial reduction of €143 million to the competing bid by CVC Capital Partners Limited. 

- VTBC has obstructed the steps taken by Empreno to investigate its misconduct by persistently refusing to disclose relevant information and documents.

Authorities in Russia are also looking into starting a criminal investigation against unidentified subjects in connection with the sale of Vivacom. However as VTB Capital plc is a UK regulated bank, Empreno and LICT intend to use all remedies available to them.

Russian state-controlled bank VTB, the parent company of VTB Capital Plc, has been under EU sanctions since 2014, but these measures exclude EU and UK-based subsidiaries that effectively serve as major financial pipelines for the Russian economy. VTB has been embroiled in the numerous corruption scandals in Russia. 

Notes to the editors:

The law firm representing the plaintiffs is Fried, Frank, Harris, Shriver & Jacobson (London) LLP.


About Vivacom:

VIVACOM (Bulgarian: Виваком) is the brand name of the Bulgarian Telecommunications Company EAD (BTC), the largest telecommunications company in Bulgaria and a former state-owned monopoly. It was founded as a joint stock company in 1992 as part of the split of Bulgaria's post and telecommunication services into separate companies. Currently, VIVACOM is leading the market in providing various telecommunication services, including fixed-line, mobile, Internet, radio and TV broadcasting, and data transmission services. The company is headquartered in Sofia, Bulgaria, employs around 3,500 people, and owns a mature distribution network with over 230 retail outlets. VIVACOM’s customer base includes both business and residential subscribers. It serves 2.6 million fixed phones and provides broadband Internet access to 400,000 households and free Internet access at more than 3,000 public locations in Bulgaria.  VIVACOM’s 3G network coverage expands to 99.41% of the population and 99.95% of the territory of Bulgaria.



«VTB Capital» (Bulgaria) attempts to illegally acquire the company «Vivacom»

In Friday, October 30, 2015 «VTB Capital» (Bulgaria) are to decide on so-called "tender" for the debt on loan of 150 million euros granted to the holding company Vivacom ( «Vivacom") from the company VTB Capital Plc. The relevant information has become available due to internal sources of the company Empreno Ventures Limited, holding 100% stake in LIC Telecommunications Sarl (LICT), on which in its turn belongs 43% of shares of "Bulgarian Telecommunication Company" JSC ( "BTC"), operating under the trade name "VIVACOM".

"VTB Capital" expects that the buyer of the debt at the same time will acquire all rights to the pledge creditor, i.e. could claim for reimbursement of 100% of shares of "BTC" AD and thus will have full control of the company "Vivakom ".

"The actions of the company" VTB Capital "is carried out with the participation of political figures, particularly the brothers Velchev and international consultants, in particular the company Ernst & Young, - says Dmitry Kosarev, owner of the company Empreno Ventures Limited. - The manner of conducting the "tender" is such that foreign / side investors are unable to participate in the tender procedure out at market conditions. 

I, on my part, I am ready to organize the refinancing of the loan and have already submitted my proposal to the bank. I have at my disposal financing sources, ready to start work to protect "BTC" JSC from the illegal acquisition/takeover by VTB Capital.


The company Empreno owns 100% of the shares of the company LIC Telecommunications Sarl (LICT), which in turn owns 43% of the shares of "Bulgarian Telecommunication Company" JSC ( "BTC"), operating under the brand name Vivacom (“Vivacom"). 24% of the shares of "VIVACOM" are owned by a minority stakeholder who is an American investment fund.

The remaining 33% of the nominal capital of «Vivacom» are owned by the company Crusher Investment, which is a subsidiary of VTB Capital Plc. Basically Crusher just technically (nominally) holds the 33% of the shares since this property is derived from a contract TRS (total return swap) and the payments to Crusher were completed a long time ago - still at the time of the previous owner Tsvetan Vasilev. Currently, those 33% must also belong (indirectly) to the company Empreno.

In connection with the above the company Crusher (i.e. VTB Capital Plc) has neither the right to dispose of this package of 33% of the shares, nor to take advantage of the rights of participation in management that they give. However, Crusher disposes of these shares as its property.

VTB Capital Plc's is a bank - lender regarding the loan of 150 million Euros provided by the holding company of «VIVACOM." The loan is secured by a collateral, including also 100% of the shares of BTC. The deadline for repayment of the loan expired on May 22, 2015. At the beginning VTB Capital Plc acted as an organizer of the syndication of this loan and was only partially involved in the provision of cash funds, but later consolidated 100% of the debt in its favor.

VTB Capital Plc did not provide information on the contract total return swap to the relevant regulatory authorities (the European Commission, the court in Great Britain, the other stakeholders of Vivacom, etc.). Meanwhile VTB Capital (Bulgaria) does everything possible not to allow the refinancing of the loan, including the actual blockage of the approval of the proposed refinancing from third parties.

Moreover, VTB Capital has never been interested in the opinion of the shareholders of "VIVACOM" regarding their intentions to refinance the loan.

The winner of the "tender" has already been informally defined by VTB. He will be one Spas Rusev. It is not difficult to guess that the source of funding of Spas Rusev isVTB Capital itself, but in this case Rusev has an agreement not with VTB (as a subsidiary of the Russian bank), but with the managers of VTB Capital (Bulgaria ) (the brothers Velchevi).

In other words VTB Capital (or rather the bank's management) in the conditions of a severe conflict of interest (between stakeholders and creditors) regarding Vivacom and while taking advantage of its relations with politically connected persons (the brothers Velchevi) and the capital of VTB Capital - in fact Russian state capital, carries out a raider attack for the acquisition of the company "BTC", which value is much higher than 1 billion Euros, but because of the loan its value becomes less than 176 million Euros. If the plan for illegal acquisition is implemented, all bona fide stakeholders of the Company ("BTC" – trans. note) will suffer.

It is important to note that all of the shares of "BTC" and shares of its holding companies are distrained both in Bulgaria and in other countries (Luxembourg) due to the criminal case in connection with the activity of CCB. Despite this distraint VTB Capital (Bulgaria) manipulates the Bulgarian Prosecutor's Office and other competent authorities and is ready to forcibly absorb the company Vivacom in favor of Rusev (or any other similar entity) in the nearest days. The boorish attitude of the leadership of VTB Capital (Bulgaria) towards the authority in Bulgaria on the background of the inaction of the official Bulgarian authorities at least raises question marks, and in human (simple – tran. note) language, this means that it invokes the thought of a colossal injustice and lawlessness.

If the actions of VTB Capital were aimed only at protecting their own interests as a creditor who wishes to secure repayment of the loan, why did the bank consolidate 100% of debt in May 2015, when it was clear that the debt would not be repaid within the deadline? Clearly, it is not about minimizing the risk of failure to return the loan, but an aggressive plan for the acquisition/takeover of the company VIVACOM is in action.

Although I do not agree either with the terms of the loan and the related pledges, or the behavior of VTB Capital (Bulgaria) to maintain the status quo and thus to protect the   value (of Vivacom – trans. note) as well as for myself, and the minority stakeholders, Dmitriy Kosarev has already proposed the bank VTB Capital, E&Y and the companies to fully refinance the loan on the same terms as the loan from VTB Capital during the course of three months. 

The idea is during these three months to give VIVACOM, already in quiet mode, the ability to refinance the loan under market conditions, especially since the economy itself allows Vivacom easy to do so. Dmitriy Kosarev intends to turn to the courts against all those who are related to this so-called "tender" for the debt and the takeover of the company by (private – trans. note) persons. The prestigious law firm Fried, Frank, Harris, Shriver & Jacobson LLP (London), which is already known for its unconditional defeat of VTB Capital Plc in other cases, was hired.