The number of members of management bodies and their remuneration is reduced by about 50%
“We are creating a basis for efficient management, transparent spending of funds and future development of the commercial companies under the State Consolidation Company (SCC) EAD. They operate without business programs and do not submit financial reports. This was said by Minister of Economy and Industry Bogdan Bogdanov at a briefing, within which a programme for the recovery of public enterprises was presented with specific objectives and deadlines for its implementation. “Our task is not to show successive problems, but to give concrete solutions”, he was adamant.
“These are public enterprises, but purely commercial. These companies need expertise. Where there is ineffective management, changes must be made. The ultimate goal is positive financial results, companies development”, Bogdanov further commented.
The Minister also found a number of irregularities in the spending of funds by SCC and its subsidiaries. In his words, there are no control systems and mechanisms to track financial costs.
“More than 90 percent of the members of the boards of SCC companies have been replaced during the caretaker government. Many of these people have had time to understand the problems of the companies and propose solutions and business programmes, but this has not happened,” the Minister said. “The company has no published financial statements for 2021 and 2022,” Bogdanov stressed. He specified that SCC, which is under the umbrella of the ministry, manages a capital of more than one billion BGN and the accounts are important so that dividends can be transferred from the company to the state.
“Every company should have a business program and goals to work towards. Currently, of the 11 active companies under the umbrella of the SCC, six, as well as the SCC itself, do not have an approved program for 2022”, said Bogdan Bogdanov.
Minister Bogdanov introduced a new expert management team in SCC. Ivan Zangochev – Executive Director and member of the Board, Elena Boltadzhieva – Chairman of the Board, and members of the Board – Desislava Chalamova, Venelin Shakov and Nikolay Zhelyazkov. He clarified that the team now taking over the SCC is temporary. Within 6 months, a transparent competition for management bodies will be organised and held so that only people with the right expertise are appointed to the SCC, which has a capital of over BGN 1 billion.
Within a month, the new team will conduct a full analysis of each of the SCC companies with specific proposals for restructuring the operations to maximize efficiency. According to Minister Bogdanov, in order to realise the huge potential these companies have, it is necessary to update and create new business programmes with clear objectives, control mechanisms and priorities, structured on a quarterly basis. Another task to be accomplished by the new team is to implement a centralized system at the SCC and the Ministry of Economy and Industry for monitoring and control of the companies with real-time data on financial and operational indicators.
Minister Bogdanov announced cost optimization by reducing the number of members of the management and control bodies and their remuneration by about 50%. He also said that the representation expenses would be limited to BGN 5,000 per year and they would be paid to executive directors only in case of specific financial results and clear reporting of expenses.
The Minister of Economy announced a restructuring of the debt of SCC to Bulgarian Development Bank (BDB) by the end of the year. For the advance payment of over 80 million BGN for a new government complex, SCC uses a loan from the Bank and pays millions in interest per year.
Minister Bogdanov found a number of irregularities in the spending of funds by the SCC and its subsidiaries. In his words, there are no control systems and mechanisms to track financial costs. Nearly 600 million BGN spent illegally for the repair of dams and over 39 million BGN from Montaji EAD for insurance, purchase of drones and construction of an alternative water pipeline for Pernik (16.5 million BGN) are only part of the abuses.
Mr. Ivan Zangochev graduated in Macroeconomics from the University of National and World Economy. Professionally, he holds a number of key qualifications in corporate finance and strategic management. He has over 20 years of experience in creating and implementing effective financial management procedures. Over the years, Mr. Ivan Zangochev has held a number of management positions in the field of finance and strategic management. He has worked for companies such as Siemens AG, Global Communications Net AD, 4C Security Solutions Limited, where he was responsible for the management of the overall financial and administrative activities of the companies. He was Chairman of the Board of Directors of State Consolidation Company EAD and a member of the Board of Directors of Kintex EAD.
Ms. Elena Boltadzhieva graduated from the University of National and World Economy, where she obtained a Master’s degree in Law. She has expertise in regulations and legal acts in Bulgarian legislation and has over 20 years of management experience in administrative processes management in a number of state institutions. Over the years, Ms. Elena Boltadzhieva has held senior positions in institutions such as the Court of Auditors, the State Commission for Commodity Exchanges and Auctions, the Ministry of Justice, the Ombudsman institution of Republic of Bulgaria, the Ministry of Health and was Secretary General at the Ministry of Innovation and Growth.
Ms. Desislava Chalamova is a Mechanical Engineer in Complex Mechanization in Construction, graduated from the Technical University of Sofia and a Master Engineer in Environment and Sustainable Development from the University of Chemical Technology and Metallurgy in Sofia. She holds postgraduate qualifications from the Mining and Geology, Sofia and American Universities. Eng. Chalamova has 30 years of experience in entrepreneurship, trade and investment, in industry, energy and environment, working with strategic Bulgarian and foreign industrial operators and investors.
Mr. Nikolay Zhelyazkov graduated from the Technical University – Varna, where he acquired a qualification degree “Master” in the specialty “Law”. He is an attorney at the Varna Bar Association and has more than 20 years of professional experience in civil and administrative law with the main focus on the protection of civil rights. Mr. Nikolay Zhelyazkov holds additional qualifications from the National Programme “Management Skills” and “Law of the European Union”.
Mr. Venelin Shakov graduated from the University of Architecture, Civil Engineering and Geodesy, where he obtained the qualification of civil engineer with a master’s degree in “Water Supply and Sewerage”. He has more than 15 years of professional experience in the design of infrastructure projects and management of investment projects in the field of water and wastewater systems. With his expertise and skills, he has contributed to the design and implementation of a number of investment projects in the areas of plumbing, fire safety, health and safety plan, construction waste management project and others. Since 2017 he has been a senior expert in the Architecture and Urban Planning Department of Sofia Municipality, where he is responsible for the management and the development of infrastructure projects in the water supply and sewerage sector.