Bulgaria wants to restrict court intervention in privatizations

SOFIA – Bulgaria plans to amend its privatization law to restrict the ability of the courts to delay landmark asset sales, a key part of reforms pledged by the pro-Western government. The sales of telecoms monopoly BTC and tobacco monopoly Bulgartabak have stumbled over legal problems, a serious setback for the Balkan state, which hopes for European Union entry in 2007. The ruling National Movement for Simeon II (NMS) filed a proposal for amending the privatization law late on Tuesday, just hours after the chief prosecutor’s office asked the Supreme Court to declare invalid the 200-million-euro ($201.4 million) planned sale of BTC to London-based equity fund Advent. Under the draft, which was faxed to Reuters, decisions by the government and the sell-off agency concerning sales that had been approved by Parliament cannot be appealed or protested against in the Supreme Court. The proposal, which triggered an outcry from opposition parties, envisages that changes should be backdated to March 23, 2002, meaning that appeals after that date are invalid. So far, Parliament has approved privatization strategies for BTC and Bulgartabak, whose sales, repeatedly delayed by previous administrations, are among the top economic priorities of Simeon Saxe-Coburg’s government team of young reformers. The proposed amendments, expected to be discussed in plenary session next week, are likely to be passed by Parliament. But their approval may lead to another legal battle if opposition parties appeal against the amendments in the country’s Constitutional Court, as they have threatened to do. The fate of BTC and Bulgartabak’s sales are now in the hands of the legal system, which under current legislation may annul the Privatization Agency’s decisions. Advent’s 200-million-euro offer for 65 percent in BTC has triggered a high-profile debate about whether the sale should go ahead, with opposition and trade unions saying the price was too low for the telecom firm, whose net profit rose by 43 percent to 241 million levs ($124 million) in 2001. The Cabinet has said it would press ahead with the sell-off, which it requires to raise needed foreign cash and assure investors of its ability to implement tough structural reforms. But the chief prosecutor’s office suspended the BTC sale on Friday, following an appeal by the main opposition center-right UDF to examine alleged procedural irregularities in the sale. On Tuesday, the prosecutor said that Advent’s acquisition vehicle, Viva Ventures, had not been properly registered and that the BTC sell-off did not meet legal requirements for a «transparent and economically effective» privatization, urging the Supreme Court to annul the planned sale. Bulgartabak’s privatization has been stuck in court since September, following appeals by the three failed bidders against the Privatization Agency’s decision to name a consortium backed by Deutsche Bank as preferred buyer for an 80 percent stake for 110 million euros. The sell-off agency says that both procedures are fair and meet all legal requirements. Although delaying both deals, initially planned to be sealed in July, would not affect the country’s budget, officials say they fear that it would send negative signals to foreign investors.

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