KPMG Appeals Fines due to CCBank
KPMG - Bulgaria appealed the fine of 100,000 levs, which it was imposed because of its audits of Corporate Commercial Bank (CCB) from 2009 to 2013 and the two auditors – who as individuals signed the audits over the past five years, Margarita Goleva and Krasimir Hadjidinev, (fined by 40,000 and 60,000 levs respectively) will also complain about the decision of the Commission for Public Oversight of Statutory Auditors.
The auditor was fined for significant deficiencies in the controls. Blatant contradiction was the last audit of the CCB from the end of 2013, according to which less than 1% of bank loans were bad, at an average of 17% for the other Bulgarian banks. After placing the bank into conservatorship by the Cebtral Bank (BNB) and the appointment of four audit companies, it became clear that the bank needed a devaluation of more than 60% of its assets, because loans worth of 3.4 billion levs were distributed to 82 companies without true operative functions.
Although the Commission for Public Oversight of Statutory Auditors tried to vote on revoking the license of KPMG - Bulgaria, the decision failed to pass, since it failed to gather the necessary majority vote of the five-member state regulator’s panel.
Regulator refused to declare openly its vote for the license revoking of KPMG. Only one of the committee members - Assoc. Professor Simeon Milev announced that he had voted to revoke the license of the enterprise. Previously, only for the BANKER weekly, chairwoman Vanya Doneva admitted that she had requested the revocation of license of the auditor for a period of two years.
After the scandalous decision (according to many observers) the members of the Commission for Public Oversight of Statutory Auditors in Bulgaria decided that there were legal impediments to announce their votes. It is meant to be secret and should remain so. The three secretive committee members are the first vice-chancellor of the University of World Economy and Head of Department "Financial Control" prof. Ognyan Simeonov, Dr. Todor Shopov, who is a professor in the department of Prof. Stoyanov and Ivan Mavrov, chief auditor of the Central Bank. At the vote on sanctions for KPMG the three requested an opinion on whether there will be a conflict of interest in the voting by the special commission. One of the auditors of the CCB - Margarita Goleva - is Assistant of Professor Simeonov and a colleague of Dr. Shopov, while the National Bank, whose chief auditor is Ivan Mavrov is audited by KPMG Bulgaria.
The State Committee for the Prevention and Detection of Conflicts of Interest ruled, however, there was no conflict of interest and they could vote on the case.