ECONOMY

Privatization charge

SOFIA – US movie producer Nu Image has filed a claim with Bulgarian prosecutors accusing the country’s privatization agency head of deliberately delaying the sale of a state-owned film studio, the US company said yesterday. The allegations come as Bulgaria’s efforts to improve its investment climate ahead of European Union entry are being undermined by a number of major privatization and concession deals that have recently collapsed. The state’s privatization agency signed a draft contract with Nu Image for the sale of a 95 percent stake in Boyana Film Studios in August but has failed to finalize the 12.2-million-lev ($7.3 million) deal. «Nu Image has approached the prosecutors about the failure of the privatization agency’s executive director to fulfill his obligations and take the steps needed to carry out the sale of Boyana Film,» Nu Image said in a statement. The company said it suspected the sell-off agency’s head, Todor Nikolov, of trying to block the deal and that he was incurring significant financial damage both to Nu Image and Bulgarian filmmaking. «We need to know why the closing of the deal is being delayed and whether Todor Nikolov’s moves are not actually aiming to torpedo the deal due to the expiration deadline stated in the draft contract,» Nu Image said. Political pressure Nikolov told a website he agreed the deal could collapse but said the fault lay with the country’s Socialist-led Cabinet, which took power the same day he signed the Boyana Film sale contract. «The deal has drawn fire from many sides, including from a number of ministers in the new coalition government,» Nikolov was quoted as saying by news website Mediapool. «There is a chance the deal may be canceled, no matter how grave the consequences for the privatization agency may be.» The privatization agency declined comment and Nikolov could not be reached for comment. The Bulgarian filmmaking guild and Culture Minister Stefan Danailov have opposed the deal, fearing it may lead to the country’s main filmmaking studio being shut down. Two other competitors had appealed the tender won by Nu Image, but a court dismissed the motions last month. Bulgaria has drawn fire from investors in recent years over the handling of the sale of state assets and high-profile concession deals. Aside from criticism from anti-graft watch groups, the EU has warned Sofia to wipe out corruption or it will delay planned entry by a year until 2008. This year, courts blocked the two largest concessions granted by the 2001-2005 government of ex-king Simeon Saxe-Coburg – a 1-billion-euro no-tender highway deal and a 526-million-euro Black Sea airport deal. The sales of two major power plants also recently fell through, as did the sale of tobacco monopoly Bulgartabak.