Банкеръ Daily


Illegal billboards in Sofia suck Euro 2 million per year

Illegal advertising boards flood the capital. Just for the last week of the last month, the Director of the Municipal Building Control, Arch. Vladi Kalinov, issued 31 orders for their removal from the most attractive places in the city. These documents make clear that there are 150 sites from which someone gets good earnings without paying anything to anyone.

All advert boards are located in properties having a status of public municipal property. Each of them has an area between 2 and 3 sq. meters. A simple calculation shows that we are talking about an advertising space of about nearly 170 sq.m. provided for consideration but the municipality has not received a single BGN for them.

This situation lasted for more than…four years. In July, 2012 the Sofia Municipal Council decided to cancel the competition for letting parts of properties of public municipal property for placing advertising units on the territory of Sofia Municipality and assigned to the Mayor, Mrs Yordanka Fandakova to open an inquiry and to remove the ads and any movable units located on the municipal property without a tender procedure or a competition which do not fall within the approved schemes for their placement as they do not meet the current regulations.

Strangely why

however, this decision of the City Parliament remains on paper only?!

More than two months ago (on July, the 20th), two municipal councillors from the group of BSP (Bulgarian Socialist Party), Mrs Milka Hristova and Mr Kaloyan Pargov, submitted a formal inquiry to the Mayor Mrs Fandakova and to the Chairman of the Municipal Council, Mr Elen Gerdjikov, raising the question why four years after the decision of the Municipal Council (No. 428 of July 19, 2012), the advertising activity in these illegal sites has not been cancelled yet. According to Mr Pargov, it was about nearly 800 advertising units – illuminated light boxes on the pillars, city lights on the sidewalks and at the public transport stops, on the telephone booths. It is evident from this letter that the owners of these units are “JCDecaux” (“Easy Doc”), “ABM Projects”, “Mediacontact”, “Advertising Network 5” and “ABB Engineering” and “Markani Line”. According to Mr Pargov, due to the inadequacy of the municipal administration,

Sofia Municipality loses nearly EUR 2 million per year

The red councillors have requested to have the contracts (if any) signed with all these companies, but so far they have not received even a reply.

The veil of these “relationships” between the advertising companies and the Sofia City Hall is raised by the text of the recently issued orders for the forced removal of the illegally placed advertising units. These orders reveal that they were issued because all of the above advert boards were installed in properties that are public municipal property without any legal basis for doing so.

The biggest offender is the Single Member Limited Liability Company “Val Sofia”. In 14 of the orders concerning the removal of illegally placed ads have been listed ... 127 sites located mainly in the Sofia city centre. 126 of them have an advertising area of 2 sq.m. and 1 of them is larger – 3 sq.m. The company is managed by Mrs Theodora Underwood, but its ownership passes through the Bulgarian company “JCDecaux Bulgaria” EOOD, to reach its true owner registered in the Netherlands, the company “JCDecaux Bulgaria BV”.

The names of the other two offending companies are different, but their owner is ultimately the same i.e. the above mentioned Dutch company?!

“Easy Doc” EOOD is also owned by “JCDecaux Bulgaria” EOOD which, in its turn, is the sole possession of the same “JCDecaux Bulgaria BV”, whose Manager is again Mrs Theodora Underwood.

The advertising areas occupied by this company are described in 12 orders evidencing that two of the sites have an area of 2 sq.m. and ten of them are with an area of are 3 sq.m.

The other five orders are addressed to another company of the same group, “Marlani Line” EOOD. This is not a surprise to anyone that its property, similarly to the above listed companies, passed through the Bulgarian company “JCDecaux Bulgaria” to reach “JCDecaux Bulgaria BV”. In this case it comes to 11 sites of 2 sq.m.

It is not difficult to find out who really is behind all this, given that the responsibility is, at least on paper, on Mrs Underwood.

This is the time to recall

one news of the end of July, 2011. Then the media magnate Rupert Murdoch announced the sale of his 79% stake in the Russian advertising company News Outdoor Russia to a group of investors led by the public investment “Bank VTB Capital”. The price was not stated. A check in the Commercial Register showed that a month earlier (June, the 9th) another media figure, this time originating from our home “elite”, Mr Krasimir Gergov, also sold his assets held in the renamed News Outdoor Bulgaria.

Shortly before that, the Bulgarian division News Outdoor Bulgaria was renamed to “K Out of Home” EOOD with a capital of BGN 6 328 500. Again, a check in the Commercial Register evidenced that Mr Gergov and the registered on the Isle of Man offshore company “Nova Corp Limited” (on 9th of June the same year) have sold their assets in KOOH to the company “JCDecaux Bulgaria” registered in the Netherlands.

According to document enclosed in the Register, the buyer has paid EUR 3 million to both sellers: Mr Gergov received EUR 1 million as he had a stake of 33.9986% in the company, and EUR 2 million went to “Nova Corp” as it owned 66.0014 percent in the company.

At that time emerged the name of Mrs Teodora Tomova Underwood. She was announced as being the new Manager of the company for outdoor advertising. As far as “JCDecaux” (or the Bulgarian “Easy Doc”) is concerned, it is a leading worldwide company for outdoor advertising. Mr J.C. Decaux himself is a pioneer in the implementation of the “urban furniture” concept. In 1964 in Lyon he is the first one to combine the bus shelter with outdoor advertising systems.

In 2013

Banker Newspaper started an investigation of the offshore companies

In a column of the above newspaper entitled “Offshore companies involved in the misappropriation of the advertising business as well” (27th July the same year) after thorough checks in the Commercial Register of Cyprus, we announced that owners of large companies in the advertising industry related with Mr Krasimir Gergov “moored” in the Island of Aphrodite. These include “A Team”, “Markan Line” and “InterReklama” associated under “Granton Enterprises Limited”. The registered office of company is located at Mihalokopolou Str. No. 12, Nicosia and in Bulgaria it is represented by Mrs Theodora Underwood. Mrs Underwood manages a dozen of PR and advertising agencies, including “A Team” and “Markan Line”. She is also member of the association Bulgarian Association for Outdoor Advertising. According to the Cypriot Commercial Register, the capital of “Granton Enterprises Limited” is amounting to EUR 3 673 080. But the entire capital minus one share of EUR 1.71 is held by “News Outdoor Bulgaria” OOD. It is interesting to note in this case the well-known in our country company, also managed by Theodora Underwood, has changed its name several times. In 2011 it is renamed to “K Out of Home” and as of the 10th of May this year it is already known as “JCDecaux Bulgaria”. All these maneuvers are certainly not accidental, since besides the name, there is also a change in the holder of the property. By July, 2010 the company was in the hands of Mr Krasimir Gergov and “News Out of Home BV”, Netherlands. Then Nova Corp Limited replaced the Dutch company and in the middle of 2011 the entire capital was transferred to “JCDecaux Bulgaria BV”.

Some three years ago Banker Newspaper managed to get hold of the record of this company kept with the Chamber of Commerce of Amsterdam. It became clear that its authorized capital is amounting to EUR 90 million and the members of the Board of Directors are Jean-Francois Decaux, Thilo Starke, Krassimir Gergov and Theodora Underwood. Thus, the offshore capital cycle is practically closed.

A light is also shed on the path to make profit from outdoor advertising as realised by the “flock” of companies around Gergov and Underwood. If anyone has forgotten, it is just their “K Out of Home” (now “JCDecaux Bulgaria”), “Pierro 97” and “Prime Outdoor” that won half of the packs in the competition for billboards of Sofia Municipality. The Agency “Prima” owned by “JCDecaux Bulgaria” popped up in the list of companies that have unduly benefited from the advertising campaigns of the European funds. At that time, the above agency has taken BGN 1 127 030 million for information campaigns and training under the operational program “Competitiveness”.

And what is the account that should be settled by all those intertwined companies with the Sofia Municipality, still no one knows!

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