Baki Bedel and Arben Havalyov, who are considered close to Ahmed Dogan, the Lifetime Honorary Chairman of the Movement for Rights and Freedoms (DPS), the party largely representing the Bulgarian Muslim minority, are owners of offshore companies, according to the global journalistic investigation the Pandora Papers. Havalyov is known as the formal owner of the luxury “seraglio” in the village of Ribaritsa that is linked to Dogan and is currently a politician from the Brigade party. Through a secret offshore company, Havalyov managed to seize the capital of the hospital in the southern town of Chirpan because of a business dispute over European money, involving the names of politicians who had demanded bribes worth millions. Businessman Baki Bedel is seen as one of the shadow financiers of the DPS since the party’s inception in the 1990s.

Bedel – the financier of the DPS

Nowadays, the name of Baki Bedel is mostly associated with a multimillion investment in a high-rise building close to Sofia’s beltway. However, the Estera skyscraper is being built only six meters away from another building, which is an architectural and legal absurdity. In a publication by Capital weekly Bedel is described as “a person with experience in road and building construction and in the maintenance of the street network in Sofia. He is currently building in Studentski grad (College Town). He has a logistics business as well”.

But Bedel had a different role right after the fall of the Communist regime. According to the former DPS second in command in the 1990s, Osman Oktay, Baki Ibrahim Bedel had been considered the “the DPS accountant” and part of Ahmed Dogan ‘s inner circle since the party’s inception. “When I came to Sofia on April 1, 1990, for the constituent assembly of the DPS, he was introduced to me as the party’s financier. I have no idea where he came from…,” Oktay recalls. “Initially, our office was on Petar Schmid Street in the Ivan Vazov district in an apartment. I saw Baki Bedel there for the first time … Later …, the DPS received offices at 45A Alexander Stamboliyski Blvd., where its headquarters are still located. Baki Bedel created a business structure closely related to the activities of the DPS, but isolated from the official finances and affairs of the party,” Oktay further recalls.

The scale of this business structure is unclear. The archives contain data that in the 1990’s Bedel was a partner in the company Biomet with Petar Pepeleshkov, a former agent of the Communist regime secret services known as State Security. Bedel was also in the management of several other companies such as Bulmaso Razgrad, Sofia Brewery, Bul Sky Holding and Orion – Lux. His companies are registered at 24 Alexander Stamboliyski Blvd in Sofia, across the street from the DPS headquarters. One of them is B and B brothers – Bulgaria, with which Bedel wins public contracts for ongoing street and road repairs in Sofia .

According to the Pandora Papers, Baki Bedel owns Aqualad Ltd., borrowing its name from American comics’ superheroes. It was registered in 2013 in the British Virgin Islands with the subject of activity “trade of ships and maritime equipment”. It was registered by a company named Fidelity. Aqualad’s profile indicates dividends as the origin of funds and planned sales for EUR 1 million per year. Its director is Vladimir Nochev, who is the manager of the company Estera 2018, which is constructing the building with the same name in Sofia.

BIRD.BG contacted Baki Bedel, who said that the company Aqualad had “no property, no activity, no money”. “It was opened and then closed automatically because nothing was ever paid for it,” the businessman explained.

However, a cross check in the Commercial Register shows that Aqualad Limited was a co-owner of the company A Priori 2013 from October 2014 to March 2016. Subsequently, the shares of Aqualad had been transferred to Bali Consulting, which is owned by Baki Bedel himself.

Havalyov – Dogan seraglio, millions of European funds and assignments through offshore companies

In 2019, the Seychelles offshore company Gimara Company Limited froze the shares of the hospital in the town of Chirpan in order to secure claims for a multimillion debt of the municipality. The Pandora Papers now reveal that this offshore company belongs to the businessman and politician Arben Havalyov. He is the ultimate owner of Shermillah Properties and Gimara Company Limited founded in 2018 with the use of the services of Ukrainian intermediaries of the offshore service provider Alpha Consulting.

Havalyov is known as the owner of a super-luxury hotel in the village of Ribaritsa, which is said to be one of Ahmed Dogan’s “seraglios”. The businessman denies this and claims that he has never seen the DPS Honorary Chairman and that the hotel has been built with savings from his work in Greece and loans. In 2008, the hotel in Ribaritsa was investigated by the Parliamentary Committee on Corruption. A major investigation into VAT fraud was then launched against Havalyov and his associates. He was sentenced in 2010 at first instance by the Pernik District Court to three years of probation. However, the Court of Appeals in Sofia overturned this symbolic sentence and returned the case to the prosecutor’s office, after which the investigation stalled.

The businessman became notorious for his photos in the company of the former Chief Secretary of the Ministry of Interior Svetlozar Lazarov, revealed by the investigative website Bivol. In 2021 Havalyov ventured into politics with the Brigade party.

“The Minister of Interior is my employee. Showman sings at my party…”

In an election campaign interview in the Bulgarian Trud (Labor) daily Havalyov brags that Svetlozar Lazarov and former Interior Minister Mladen Marinov (fired by former Prime Minister Boyko Borisov for ties to the DPS) were his “good employees” and that Bulgarian celebrity showman Slavi Trofinov performed and entertained him and his guests on his birthday and showed him “respect and admiration”.

In the same interview, Havalyov boasts that he had secured funding of over BGN 150 million as a consultant for European projects. His secret offshore companies, listed in the Pandora Papers, the Seychelles companies Shermillah Properties and Gimara Company Limited, are connected precisely with such an “unfortunate” European project.

The saga began back in 2009, when a company associated with Arben Havalyov won a public contract under a European program for EUR 980,000 without VAT. On April 30, 2009, the mayor of Chirpan signed a contract for consulting services with the company Protiko il, a company that had already won public contracts for over BGN 7 million. Today, Arben Havalyov, himself, is the sole owner of the capital. As of 2009, the company was owned by Havaliov’s sister, Ilvie Imamova.

In April 2013, the municipality won funding for a project under the Rural Development Program and inked a contract for the reconstruction and rehabilitation of the water supply network in three villages, Gita, Svoboda and Zetyovo, worth a little over BGN 17 million without VAT. The consortium Kram Schtrabak EVI MSM was selected as the contractor among 19 bids. The company Evidence Engineering Ltd. Sofia has 69.4% in it, the largest share. Its sole owner is Stella Stoyanova. She is Havalyov live in partner and they have a son named Antoine. The public scanner of BIRD.bg shows over 65 public procurements in which Evidence Engineering participates as a contractor.

The project had been completed, but due to suspicions of abuse it had been sanctioned by the State Fund Agriculture (SFA), the agency in charge of European funds, with 100% correction.  Sources of BIRD.bg say that there have been many problems when awarding the public procurement. The municipality chose the most expensive offer, three times higher than market cost. Sources in the SFA claim that the checks on the offers have continued well beyond the legally established deadlines. It has turned out that the prices offered have been excessively inflated. After the imposition of the sanction, the Municipality of Chirpan has refused payment to the companies controlled by Havalyov. Their managers have filed an arbitration case and have won it. But subsequently the final rule has been issued by the Supreme Court of Cassation.

Meanwhile, in 2018 Havalyov created the two offshore companies, to which he assigned his receivables claimed by the Municipality of Chirpan at a total value of BGN 12.3 million. The current situation with this debt is unclear. According to the mayor of Chirpan, whom BIRD.bg contacted for comment, the ill-fated project led to the inclusion of the municipality in a special supervisory list of OLAF, the European anti-fraud office.

Havalyov about the offshore companies: “There is nothing there, you are researching in vain. Manoil Manev asked me for 2 million. Rumen Porozhanov wanted money too”

BIRD approached Havalyov as well. He refused to say if he knew who was behind the offshore companies with the words: “I can’t tell you this thing, it’s not interesting. As a journalist, you are trying to find something that does not exist, but it’s not interesting. What is interesting is who steals money now.” According to Havalyov, the problem in Chirpan comes down to the fact that “Mayor Ivaylo Kracholov does not want to pay”, and the decision of the arbitration in favor of his companies had been revoked in the Supreme Court of Cassation because of “political connections”.

Havalyov also said that lawmaker Manoil Manev from the formerly ruling Citizens for European Development of Bulgaria (GERB) had asked him for BGN 2 million to “solve the problem with the mayor”.

Havalyov claims that at this point he ended the meeting with Manev “because I am a very honest man, I just kicked him out”. Manev then threatened him with “you will not get your money”.

Our team reached Manoil Manev, who confirmed that he knew Havalyov and had met with him. He refused to comment on the allegation that he had wanted a bribe from Havalyov, because the latter had submitted complaints to the Regional Governor and the Municipal Council of Chirpan “listing 100 people who had hindered him”. Manev said that his meeting with the businessman was in connection with the previous local elections.

The former Director of the SFA Rumen Porozhanov is also involved in the saga with the water network of Chirpan. He had demanded EUR 1 million from former Chirpan Mayor Kichka Petkova about which Havalyov had approached the prosecutor’s office.

“As Porozhanov did not receive 1 million, he punished the municipality with a 25% correction,” said Arben Havalyov.

The version of the SFA is that the inspectors found a violation of the Public Procurement Act because the contracting authority had ranked first a bid that had not met the requirements. An on-site inspection followed, which revealed significant violations. Then a 100% adjustment was imposed on the municipality meaning it must reimburse the SFA with the BGN 9,380,972 paid in advance, plus interest.

According to the Mayor of Chirpan Ivaylo Kracholov, the assignment of the debt to the offshore companies has a simple reason. The group implementing the project has not paid VAT. Apart from that, in violation of the contract, Evidence Engineering used a subcontractor for the construction of the water network. They also did not pay them, but owed them serious money. According to Kpacholov, the company is heading towards “bankruptcy”, but there are no published documents in the Commercial Register to confirm this hypothesis. The Mayor said he should collect about half a million in court costs from Evidence Engineering after the rule of the Supreme Court of Cassation, but the money was practically uncollectible. According to Havalyov, however, the claim that he has offshore companies is just “pulling wool over the media’s eyes”.

Thus, Havalyov denies owning offshores but the facts say otherwise. The assignment is a fact and the seizure of the capital of the municipal hospital shows that the offshore companies have been part of the new politician’s plan to fight the municipality for millions. All this, plus the accusations of huge bribes demanded by politicians, makes the case particularly suitable for investigation by Laura Kovesi’s European Public Prosecutor’s Office.

Four Bulgarian politicians in the Pandora Papers so far

BIRD.BG is a partner of ICIJ in the Pandora Papers investigation and examines the information about nearly 200 persons with Bulgarian citizenship or living in Bulgaria, who appear in the Pandora Papers. They include politicians, Delyan Peevski, Nikolay Mladenov and Nikolay Barekov and now Arben Havalyov is joining them. In addition to them, there are big financiers, lawyers, people involved in multimillion-dollar fraud schemes, but also entrepreneurs with legitimate business and no visible political protections, who have registered offshore companies and have declared them before the Bulgarian authorities.

BIRD.BG has already unveiled the secret offshore companies of the majority shareholders in First Investment Bank Tseko Minev and Ivaylo Mutafchiev, who over the years have received loans of over BGN 1 billion from their own bank. Their offshore companies have also been used in schemes to racketeer business people with Delyan Peevski being the ultimate beneficiary.

The Pandora Papers contain confidential information from 14 offshore service providers, the so-called Secrecy Brokers, enterprises that set up and manage shell companies and trusts in tax havens around the globe. Trident Trust and Alfa Consulting, which registered Felina and Verum respectively, are among them. But the data show that other companies also work with Bulgarian clients. The previous major leak, known as the Panama Papers, contained files from only one company – the now-liquidated Mossack Fonseca & Co.

ICIJ has obtained more than 11.9 million financial records, containing 2.94 terabytes of leaked confidential information from these offshore service providers. For nearly two years, ICIJ organized and led an investigation that grew to encompass more than 600 journalists in 117 countries and territories. This is the ICIJ’s largest ever investigation on the offshore world unlocks financial secrets of politicians, billionaires and the global elite

ICIJ shared the files with 150 media partners, launching the broadest collaboration in journalism history. Their publications began on October 3. They reveal the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 country leaders.

Globally, the amounts hidden in offshore destinations, for which data are available in the Pandora Papers, are estimated at several trillion US dollars. In the Bulgarian segment there are data for large-scale damage to Bulgarian taxpayers worth at least BGN 1 billion.

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