If the announcement by Bulgarian authorities that a prospective investor had been found to build a Formula One race track sounded too good to be true, that is because it was, a report by Bulgarian daily Sega said on September 3.

Bulgaria's Economy Ministry said on August 30 that it signed a co-operation protocol with Emirates Associated Business Group (EABG), which it said was a state-owned holding group in the emirate of Abu Dhabi, while its president Mohammed Abdul Jalil al-Blouki was a sheikh.

Not so, says Sega, quoting a letter by EABG chief executive Raid Abu Hudra.

"We never expressed ourselves as Sheikhs or governmental representatives; on the contrary we kept on saying that we are a private company based in Abu Dhabi doing some business around the world; we are not sheikhs; we are not a governmental company. We stressed several times on this points," according to the letter, which Sega posted on its website.

The letter said that EABG had not been interested in building a Formula One race track when it was contacted by an intermediary allegedly acting on behalf of Prime Minister Boiko Borissov's office, but the group decided to schedule a meeting when the prospect of other investments had been raised.

However, the project was in a very early stage and did not stir EABG's interest, which "expressed interest maybe in the agricultural sector and maybe other sectors if there are any", according to the letter.

The letter said that the group was "shocked with the way this subject has been announced" and asked Bulgarian authorities to retract previous statements because they were false. The group had been promised that "a letter from the PM office will be distributed to all press denying all this news because it is fake; which so far is not received (sic)."

In fact, appearing in the morning show of private channel bTV on September 2, Borissov showed no sign that he was aware that there was anything wrong, saying that he was confident in the ability of the motor sports federation to handle the issue as long as there was no Budget funding involved. The current plans envision the use of the Dobroslavtsi air field near Sofia to host the track, with a plot of 320ha worth an estimated 180 million euro to be contributed by the Government.

The intermediary who set up the meeting appears to be one Anastas Terzobaliev, according to Sega, the owner of a company called International Company for Development of Real Estate and Tourism. Contacted by the newspaper, Terzobaliev denied setting up the meeting.

Borissov refused to issue any apology, saying that he was not to blame for the misrepresentation of the events. "I met the representatives of the firm at the request of MP Roumen Petkov and the head of the [motor sports] federation [Bogdan Nikolov], who said that they had found an investor for the project. Any MP that asked for such a meeting, I would have agreed. Ask them why the owner was presented as a sheikh and the company as state-owned," Sega quoted Borissov as saying.

Petkov and Borissov have clashed often in the past, mainly over the issue of how to fight organised crime and how the Interior Ministry should be run. Borissov was Interior Ministry chief commissioner in 2001/05, while Petkov was Interior Minister in 2005/08.

Petkov could not be found for comment, but Nikolov was adamant that the deal was for real and so was the "sheikh", Sega said. "I don't know if he's an emir or not. All his sons are sheikhs. Al-Blouki is the son of the president of Abu Dhabi," the daily quoted Nikolov as saying. However, he then said that he had not made the introductions during the meeting with Borissov, saying that he did not know some of the details himself.

On September 3, Petkov told private television channel bTV that he was not phased by the revelations and once again said that Bulgaria had never been closer to building a Formula One race track. However, he said that the identity of the investor had been misrepresented: "It is our mistake, I won't say whose, how we presented the head of the company."