Bulgaria is being shaken by a major property scandal involving two key ruling We Continue the Change party (PP) politicians: a former minister and the current finance minister. An investigative portal's findings reveal that this is no "cut and dry" real estate speculation case.

The scandal in Bulgaria involving leading politicians from the ruling We Continue the Change (PP) party, including the current finance minister, grows bigger by the day. The Bulgarian investigative portal BIRD has uncovered the strange real estate deal involving PP MP and ex-Minister of Innovation Daniel Laurer and the company ‘STV Consulting’ connected to PP Finance Minister Asen Vasilev. Later, businesswoman Stanislava Arnaudova, known as the ‘Queen of Tolls’, also appeared in the media in conjunction with the property. Arnaudova is the owner and CEO of Intelligent Traffic Systems AD, a company contracted by the Bulgarian state to provide digital toll services in exchange for a substantial commission.

The building at 3 Chatalja Street in Sofia, which according to some sources also served as the headquarters of the PP party, was bought on 19 June 2019 by STV Consulting, then owned by the current Finance Minister, Asen Vasilev. Vasilev only transferred his stake in the company to his partner Mario Sotirov in May 2021, upon joining Bulgaria’s caretaker cabinet.

The property was bought for more than 1.8 million Bulgarian leva (about 951,000 euros), and the money was secured by a mortgage from Procredit Bank. The total loan amount was higher than the purchase price and was re-mortgaged in July 2021 with a new contract, this time by Eurobank Bulgaria for 2.9 million levas (about €1.5 million).

According to Daniel Lorer’s assets declaration from the day of his inauguration as innovation minister, he had already signed a preliminary contract for a condo in the same building back in 2020, investigative portal BIRD reports.

The contract is for the purchase of an office and three other smaller premises – one in the basement and two technical – for a total of 351,950 levas. The preliminary contract between Lorer and the Asen Vasilev-linked STV Consulting was finalised on 6 April 2022. The property was again declared by Lorer in his declaration of assets in 2022, when it was purchased.

Lorer’s first transaction raises a number of questions.

The price confirmed as final in the preliminary contract is close to the price per square metre at which the entire property was originally acquired. But going prices per square metre in the area at that time were at least twice as much. Also it does not reflect the fact that a substantial mortgage loan had in the interim been taken out to renovate the building of which the apartment is a part.

According to Asen Vasilev’s own words, a complete overhaul of the building was being done and was completed in 2021, ie. before the final contract with Lorer is signed. So it seems that Vassiliev’s company not only sold an office and service space at a bargain price to his party colleague Lorer, but also ‘gifted’ him the cost of the major renovation.

Apart from being a savvy buyer and acquiring the property at a bargain price, Lorer has proved to be a cunning seller, as well. He managed to sell his units in the building at five times the price.

On 7 September 2023, he sold the office and smaller spaces in the building to Stanislava Arnaudova, Queen of Tolls. On the same day – 7 September 2023 – STV Consulting sells the rest of the building to the „C Trading 2016” company, which is the sole property of the same Stanislava Arnaudova.

However, the land registry data show that Arnaudova bought Lorer’s units of the building for even more than the STV Consulting portion of the property in terms of square metre price, and for five times more than Lorer had paid for the property originally.

It therefore appears that Stanislava Arnaudova agreed to pay much more for Lorer’s property than for the rest of the building. The question is why Arnaudova agreed to such a transaction.

As for what’s behind all this, stay tuned for the next part of our series.