site.btaPlovdiv Municipality Appeals Share Transfer in International Plovdiv Fair

The local government in the southern city of Plovdiv has challenged in court a change in the ownership structure of the International Plovdiv Fair, following a share transfer in Paldin Tourinvest where the majority owner is Plovdiv-based businessman Georgi Gergov and Plovdiv Municipality holds a blocking interest.

The City Hall has taken the matter to the court in keeping with a decision by the Municipal Council earlier in November.

The share transfer

By the share transfer approved by the General Meeting of Paldin Tourinvest on November 24, Georgi Gergov acquired controlling interest in the International Plovdiv Fair of 79.39%, after a 29% stake in the company, held so far by Varna Municipality and worth BGN 16.3 million, was contributed as a non-cash asset to the capital of Paldin Tourinvest, a company controlled by Gergov which so far owned 50.36% of the shares in the exhibition venue.

At the general meeting, the representative of Plovdiv Municipality voted against the transfer asking to exercise the city's blocking minority to which it is entitled under the Municipal Property Act as a public shareholder. Gergov's representative at the Shareholders General Meeting ignored the local government's vote against and held that the motion for a capital increase and admission of a new shareholder had been validly carried.

A court battle

The Shareholders General Meeting followed a November 17 decision by the Supreme Administrative Court, which conclusively voided a Varna Administrative Court judgment that was the only obstacle to the share transfer.

In December 2021, the Plovdiv Regional Governor put the deal on hold. He was acting on instructions of then economy and industry minister Ninova, who argued that the transfer would have been tantamount to clandestine privatization.

Further back, in 2017, the Plovdiv Municipal Council resolved on returning the shares in the Fair to the State, but that resolution was never implemented.

Established in 1892, the Plovdiv Fair is Bulgaria's largest.