The recent hostile take-over of two newspapers from the WAZ group brings questions of ethical business practices and political influence to the forefront in Bulgaria.
The rather hostile take-over of two newspapers from the WAZ group in Bulgaria has raised several political questions as to whether it is an ethical and democratically correct over-concentration of influence in the hands of businessmen doing business with the state.
The three most important newspapers in Bulgaria in order of influence are the Telegrafo owned by a traditional media group in Sofia, Trud and 24hrs.
The latter two, previously owned by the WAZ German group were purchased by a company owned by Ognyan Donev in agreement with his partner Lubomir Pavlov but with the disagreement of the third partner Hristo Grozev. The purchase was financed by a Bulgarian bank, reportedly without the consent of Grozev.
One might say that two newspapers among the many in Bulgaria is no big deal. Yet, if it is taken into account in the context of the business interests of Donev, then the political element gets into the picture; an element, which in other member states is said to generate conditions of “interweaved interests”.
This was the case of Greece, which passed a law disallowing companies that are active in the media being owned by the same businessmen who do business with the state in terms both of public procurements and public works.
Six years ago, the Greek government had a real battle in Brussels with the European Commission in order to pass a law disallowing such a combination of media and state procurements in the hands of one business group.
It took a couple of years for Greece to pass such a law because Greek and French contractors who at the same time were media owners had developed a very strong lobbying in Brussels. Yet, shortly after the Greek government felt in 2009, the law was not enforced by the new government as a favor to media owners and this was one, not the major but one of, of the reasons Greece is today in such a deplorable situation.
In this context, it worth considering that Donev, together with Pavlov and another partner, Ivo Proakopiev (owner of other media, namely Kapital and Dnevnik newspapers), have mediated for the sale of 26% and the management (!) of Obshitinska Banka, a bank belonging by majority of the Municipality of Sofia, to Hristo Kavachki.
What make this story interesting is how a public bank sold 26% of its share capital and the management and how such a purchase is in line with Bulgarian corporate logic. Last but not least, is worth mentioning that Mr. Donev is very close to the former pime minister of Bulgaria and former mayor of Sofia Stefen Sofianski.
Even more interesting is that Donev is the owner of Sopharma pharmaceutical firm, which is by far the largest supplier of medicines and medical products to the National Health Insurance Fund NZOK, the state owned company which makes all pharmaceutical purchases for public hospitals. That Bulgaria's current Deputy Health Minister Gergana Pavlova was formerly one of the top executives of Sopharma is also an element to consider.
Prime Minister orisov is a pro-active, action-oriented and intelligent prime minister, one of the most capable and forward-looking in Europe. “Interweaved interests” is a phenomenon of our times that proved detrimental to many countries including Greece.
The case of the combination of a pharmaceutical supplier of state hospitals acquiring media in Bulgaria is not a case of legitimacy but it is political and the good thing for Bulgaria is that Boyko Borisov is not a manager but a politician.
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