SOFIA CITY COUNCIL MOVES TO REGAIN CONTROL OVER MUNICIPAL BANK

Sofia City Council (SCC), whose mandate expires in the autumn, will make a final attempt to regain its control over local Municipal Bank.

At a meeting held on July 14 2011, the city authorities decided to call an extraordinary general meeting to select new members of the bank's supervisory board and to change the financial institution's by-laws.

SCC will offer to appoint supervisory board members Petya Dimitrova, executive head of Postbank, and Stefan Nenov, who was once part of the team of PriceWaterhouseCoopers and now has its own consultancy. Dimitrova and Nenov will replace Nikifor Angelov and Dimitar Kolev.

For about 10 years, SCC has not been able to exercise full control over the bank despite its 70 per cent stake in the lender, since all major decisions require the approval of 75 per cent of shareholders.

The remaining stake in the bank is owned by firms linked to Bulgarian tycoon Hristo Kovachki and several other municipalities.

Sofia's municipal authorities lost control over the bank when two companies run by the city, water utility Sofiyska Voda and Patishta I Suorazheniya, sold their stakes in the bank without obtaining approval from the council. In 2002, the water utility sold its holding to Sofstroy, partly-owned by SCC, which later offloaded the stake to MAX 2003, as firm controlled by Kovachki.