Банкеръ Weekly



In just a few days the competition for taking control over Industrial Fund became furious. Attacks for conquering the management of the former privatisation fund were initiated by Sofia International Securities investment intermediary. The company bought up the shares, owned by holders from the country. The first obvious attempt was made on September 11, when 46,035 shares of the fund (over 5% of its capital) were sold. Sources of the BANKER weekly revealed that they were bought by a person close to Sofia International Securities. Thus the intermediary became the largest shareholder in Industrial Fund. At the same time its opponents - the current managers of the company, including the MP from the Movement for Rights and Freedoms (MRF) Ismet Saraliisky, only control about 15,000 shares and fall considerably behind.However, there was another operation that excited the aggressor. Several transactions involving 20% of the capital of the Vratsa-based Dounav holding were mediated by Dealing Financial Company last week and, as it turned out later, the stake was again acquired by Industrial Fund. The fund's managers paid BGN175,000 for the shares of Dounav. What is more important, though, is the fact that this is the amount of money missing in the fund's bank accounts. Until now, these accounts contained more than BGN800,000 and thus attracted Sofia International Securities to get into the competition. Long ago the target of the capture sold the shares it acquired due to the 1996-1997 mass privatisation. Since then it has possessed nothing but cash funds and bonds. In order to acquire a sufficient stake in its capital and thus conquer all available funds, Sofia International Securities bought shares of the fund at a price higher than the net value of its assets. And now it turns out that its own money is flowing out to investments with dubious return. The whole story may also look pretty funny, considering that a year ago Industrial Fund's Executive Director, Borislav Kirov, told a newspaper that he was not planning to invest in shares, because whoever did so lost his money.Dounav holding was established by several businessmen from Northwestern Bulgaria who had been struggling against each other for about a year now. The shares acquired by Industrial Fund were mainly controlled by one of its managers and executive director until 2001, Evgeni Evgeniev. Dounav holds majority stakes in three companies in the region - ZMK-Ruzhintsi, Putstroyengineering-Vratsa, and Bdin-Vidin. Sources familiar with the case claim that Industrial Fund's managers have a chance to profit by the battles within the holding, because Evgeniev was only one of the owners with whom they were in good relationship. Anyway, they will be able to sell the newly-acquired shares at a profit. But if Sofia International Securities takes control over the fund, its directors will be isolated from the management and will not profit by the Dounav shares. That's why experts of Sofia International Securities suspect that the acquisition of the shares was actually an attempt to drain Industrial Fund. This is a possible explanation for their high acquisition price. Other sources slander that part of this price has not been received by the previous holders of the shares but by other people.Fears from future manouvres aiming to drain the investment company may force Sofia International Securities to act faster than it initially intended. Being a shareholder in the fund and controlling over 5% of its capital, the intermediary is allowed to place an inspector in Industrial Fund to monitor the deeds of the managers. A procedure for the preparation of a general meeting is also expected to start. The general assembly will change the members of the Board of Directors. Besides, Sofia International Securities is believed to be holding a much bigger amount of shares than the officially registered 5 per cent. However, the shares are kept in reserve and will be used when necessary, rumours spread.

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