Bulgaria 1994 - BG Plan Work-III

Photo: Konstantin, Rouman & Ivo

One morning I saw a paper with a front page headline about BG Plan. I bought the paper and had Evgeni translate it for me. It alleged that BG Plan was moving money out of the country and investing in Austria. It had a couple of other accusations, none of them that to me seemed implausible.

Other newspaper articles would catch our attention from time to time. An entire front page of one newspaper was of a completely naked politician who had been set up with a prostitute. Another article suggested that many of the Sofia beggars were actually well off, even having vehicles deliver them to work in the morning in front of the Sheraton Hotel.

One Saturday morning I came into the office for some reason, and Konstantine was showing pictures of he and his wife on a recent trip to Greece.

One of the pictures showed Konstantine kissing his wife. When Konstantine went outside, one of the guards said that Konstantine "Only kisses his wife when the camera is looking."

Photo: Aleksander Nevski Church, Sophia

During the final few weeks I looked at a number areas:

• Financial projections. I modeled the future financial results of BG Plan using various scenarios. I reported the results to management to illustrate that the company is doomed to insolvency unless they replaced the First Plan.
• Pyramid Selling. I was able to get agent level data on sales commission. Not surprisingly the vast majority of all compensation went to a few people at the top, who actually had few sales. For any new sale, the selling agent received less than 50% of the commission paid. I shared with management my analysis and urged them to abandon the pyramid compensation structure.
• Accountability. BG Plan has a Board of Control to uphold the rights and interests of stockholders, but never performed any of the functions required by the Cooperative Law. In addition, none of the 3 members of the Board of Control were qualified to serve, since they were part of BG Plan management. No financial results had ever been reported to the 500 stockholders.

Working primarily with Evgeni and Krasi, we finished the revised assignment on time and I wrote my report. I submitted the report, then took off by bus for several days in Turkey.