Court Reveals Shadow Dealings in Innovation Fund

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The Administrative Court in Sofia confirmed the suspicions of gross violations and manipulation by the Executive Agency for Promotion of Small and Medium Enterprises in the distribution of millions of levs through the National Innovation Fund. The decision of the magistrates in one of the case against the agency (issued on January 27) makes it clear that in assessing and evaluating projects administrative errors have been done, due to which a number of innovative ideas have been left with no means of realization.

The entanglement of the case with the money for innovation (9.1 million levs) occured at the end of 2012. Then, out of 67 studies participating in the sixth competition of the National Innovation Fund only 36were approved. The report of the evaluation committee was signed by the then Director of the Executive Agency for Promotion of SMEs Mariana Velkova. A day later the contracts with the approved companies became a fact. Along with stunning speed officials, however, unleashed a scandal, as among the selected projects were ones that were far away from the main objective, namely the new technologies. Strategma Agency received 264 thousand levs for “advisory service for the development of organizations in the public and private sectors.” A company under the name Prolet was subsidized by the maximum amount of 500 thousand levs for a complex automation of its production processes without specifying what the new technology was and contrary to the requirement to finance innovation of public importance. But the money was absorbed.

At the same time, among the rejected proposals there have been many with proven innovative potential. The project of “B plus K” Ltd. was protected by three patents, one of which released in Germany, and in 2011 the company won a silver medal at the International Exhibition of Inventions in Geneva. It is in fact the appeal of “B plus K” Ltd. against the decision of Mariana Velkova to rank contenders that the Administrative Court is now ruling.

First, the magistrates have found that, contrary to the legal provisions, the report signed by Mrs. Velkova includes only projects approved and the rejected ones are not mentioned. There is no reasoning for the decision – neither ranking nor a pool of delisted projects. After a forensic examination the court found that Mariana Velkova’s statement that “B plus K” Ltd. does not have the organizational and technical capacity, as well as the appropriate equipment for the project implementation, were completely rejected.

Moreover those who assessed the project, although they were of too inadequate professional competence (one example is a 80-year-old engineer specializing in textile machinery), had given a positive assessment to “B plus K”. Nevertheless the final decision of the agency assumed that the candidate does not meet the eligibility criteria for which it was removed out of competition. In this case, the court held that there has been a further material breach of administrative and production rules, because in this case the agency again did not give reasons for the rejection of the proposal.



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