April 7, 2015 / 4:36 PM / 4 years ago

UPDATE 1-Former Bulgarian central bank official charged in bank collapse

(Adds quote, details, background)

By Tsvetelia Tsolova

SOFIA, April 7 (Reuters) - Bulgarian prosecutors charged a former central bank deputy governor for abuse of office on Tuesday, saying he failed to act on a report showing failings in how Corporate Commercial Bank (Corpbank) was run.

Corpbank collapsed last year following a run on it in June, triggering the biggest banking crisis the country has seen since the 1990s.

Corpbank’s fall raised serious concerns over the quality of banking supervision in the Balkan country and reinforced its reputation as one of the European Union’s most corrupt states.

Rumen Simeonov is the second former central bank deputy governor in charge of banking supervision to be charged with abuse of office since Corpbank’s collapse. He could not be immediately reached for comment.

“The crime has been carried out with the aim to bring benefit to the shareholders of Corporate Commercial Bank,” prosecutors said in a statement.

The prosecutors said a report of the central bank’s supervisory inspectorate from February 2010 had established numerous shortcomings in Corpbank’s business activities that were threatening the interests of its depositors.

“Despite being duly informed about that, Simeonov did not apply the supervisory measures provided for in the law,” the prosecutors said.

Last year, prosecutors charged Corpbank’s main shareholder, fugitive tycoon Tsvetan Vassilev, with embezzlement and issued an international arrest warrant for him. He is currently in Serbia awaiting a court ruling there on whether to extradite him to Bulgaria.

Vassilev denies wrongdoing and said the run on his bank was a conspiracy hatched by his rivals, in collusion with government officials and prosecutors. In a statement recently published on his website, Vassilev said he planned to take Bulgaria to an international court for “deliberately ruining” the bank.

Bulgaria’s central bank revoked Corpbank’s licence in November after an international assessment pointed to major management failures and concluded the bank had to write off two-thirds of its assets. A court will decide whether to declare the lender insolvent later this month.

The Bulgarian state has become Corpbank’s largest creditor, after it paid out over 3.5 billion levs ($1.94 billion) in guaranteed deposits. ($1 = 1.8033 leva) (Editing by Matthias Williams and Tom Heneghan)

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