The logo of Corporate Commercial Bank is seen on the facade of a branch of the bank in Sofia June 23, 2014.

Sofia - Bulgaria will strip Corporate Commercial Bank (Corpbank) of its license and alert prosecutors to possible malpractice at the lender, the central bank said.

The statement on Friday follows an audit of Bulgaria's fourth largest-bank, which was taken under state control last month following a run on deposits by clients unnerved by reports accusing the main shareholder, Tsvetan Vassilev, of shady commercial deals.

He denies any wrongdoing.

The central bank said there was key information missing on loans worth 3.5 billion levs ($2.44 billion) and said that a significant part of the bank's loan portfolio was linked to parties related to its main shareholder.

It said Vassilev took out 205 million levs from the bank via a third party just before the state took control.

Prosecutors should determine whether that withdrawal was tantamount to “robbing” the bank, the central bank said.

The central bank also said it would open insolvency proceedings against Corpbank and would hive off its good assets and liabilities into a separate unit of the lender.

Corpbank's dramatic collapse was a reminder that despite progress from the worst days of the euro crisis, parts of Europe's financial system are still far from secure.

The run quickly spread to another bank and saw Sofia announce a protective $2.3 billion credit line.

It also stoked memories of a 1996-97 crisis in Bulgaria, when 14 banks collapsed, and followed much more recent bank meltdowns in Ireland, Greece, and Cyprus.

The central bank had shut down Corpbank's operations until July 21st and had ordered an audit to establish how much money the lender will need to restart its operations.

“The results of the review of Corporate Commercial bank speak, to put it mildly, about actions incompatible with the law and good banking practices,” the central bank said in a statement.

“Substantial parts of the credit dossier for loans worth of 3.5 billion levs out of a total loan portfolio of 5.4 billion levs are missing, and were most likely destroyed in the days before the central bank sent administrators there.” - Reuters