RUSSIA’S STAKE IN BULGARTABAC NOT SUSTAINED BY MAGISTRATES

Although the claim submitted to the Sofia City Court on behalf of the Russian Federation for imposing a distraint on 49% of Bulgartabac Holdings' shares was not sustained at the court of first instance, it could seriously hamper the sale and the operation of the new owner.

Russia's claims to Bulgartabac began with the attempted privatisation of the holding company in 2002, when the Russian company Metatabac was among its candidate-buyers and Russia threatened that the issue of ownership would be placed to the potential buyer. Russia then claimed ownership in 12 enterprises of Bulgartabac on the grounds of the arrangements of 1947, according to which the former USSR had ownership rights on all German properties on the territories of the countries it had defeated in the war. 

Bulgartabac's factories were handed over to the Soviet Union after September 9, 1944, under the signed agreement for payment of reparations to the USSR. Because of the participation of the German Reemtsma company in Bulgaria's tobacco industry, an agreement was signed in 1953 for granting about 25 enterprises on lease to our country, Bulgartabac among them. Foreign Ministry representatives said there were no grounds for Russia's claims, while representatives of the Russian President stated that they had documents and could present them in case of a lawsuit.

On Thursday, the court dismissed the consideration of Russia's claim for lack of evidence of the authority of the petitioner but the case may be appealed within a week.