(SOFIA) - Prosecutors here said Thursday they had launched a probe against the former head of the Bulgarian road agency, Vesselin Georgiev, for alleged abuse of power and misuse of EU funds.

"A report by the National Audit Office showed that the road agency did not meet a number of procedural requirements when awarding public tenders. There is evidence of the misuse of over 100 million leva" (51 million euros, 79 million dollars), prosecutor Nikolay Kokinov said.

"It is clear that was a conflict of interests," he added.

Georgiev resigned as head of the road agency in February following a report in the weekly newspaper, Capital, which revealed he had awarded road repair contracts to his brother's company.

At the time, two high-ranking officials at the agency were also arrested for allegedly demanding bribes.

The scandal prompted the European Commission in Brussels to freeze some 300 million euros in subsidy payments due to Bulgaria until the probes against the three officials were completed.

Corruption concerns also subsequently prompted the freezing of an additional 150 million euros in subsidy payments for agriculture and regional development.

Bulgaria joined the EU as its poorest member in 2007 but is still under close scrutiny from Brussels for failing to curb corruption and organised crime.

If the EU newcomer fails to come up to scratch, Brussels has threatened to fully or partially suspend some 6.8 billion euros in structural and cohesion funds available to Bulgaria until 2013.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.