The European anti-fraud office (Olaf) agreed to give Bulgarian authorities three months to investigate allegations that 42 meat and milk processing firms embezzled European Union funds, Dnevnik daily said on July 31.

Olaf's latest mission to Bulgaria, which arrived in Sofia on July 29, presented a list of 98 projects in which it suspected that funding requests were overstated by beneficiaries. The projects had been funded under the EU's pre-accession aid programme Sapard in 2002/03.

Fifteen of those projects have already been cleared of any accusation of wrongdoing and the remaining 83 would be investigated by prosecutors over the next three months, Agriculture Minister Miroslav Naidenov said, as quoted by Dnevnik. The total amount of subsidies allocated to those projects was 50 million leva.

Companies cleared of wrongdoing would be taken off Olaf's list of debtors, while those found guilty of embezzlement will have to pay back the money, although they will have up to two years to do so.

According to Naidenov, a number of the projects investigated used the scheme under which old equipment was sold as new, using shell companies, so that the money was never spent by the beneficiary company.

The scheme is often referred to as the Nikolov-Stoikov scheme by Bulgarian media, after an Olaf report in June 2008 accused more than 50 firms, which Olaf said were controlled by Bulgarian businessmen Mario Nikolov and Lyudmil Stoikov, of embezzling EU funds.

Stoikov was cleared in Bulgarian courts and Nikolov is still on trial, but people whom Olaf identified as accomplices in Germany were put on trial and convicted. Both businessmen had made big campaign donations to Bulgarian President Georgi Purvanov and the Bulgarian Socialist Party, voted out of government at the July 2009 elections, which prompted Olaf to say in its 2008 report that EU funds embezzlers were protected by politicians.