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SOFIA (Reuters) - Bulgarian prosecutors on Tuesday charged former Foreign Minister Daniel Mitov with mismanagement that led to state losses of about 500 million levs ($278 million) related to signing contracts in breach of public procurement rules.

Prosecutors said Mitov, foreign minister between 2014 and 2016, signed agreements with the Farm Ministry to use the same company that ministry used for hotel booking and airline ticket services between January and July 2016.

Prosecutors said the agreements did not envisage any control by the Foreign Ministry over the prices the company charged for the services, which led to the financial losses.

They argued Mitov, who denied wrongdoing, should have had opened a separate public procurement order for these services.

Mitov told reporters he was surprised with the charges and noted that Bulgarian ministries have been using similar practices for years.

"I cannot understand what these charges are all about, because if there is some violation, it is in the company which at a certain moment may have overcharged both ministries. After Farm Ministry checks, it has returned money to both ministries," he said.

Mitov served in the previous government of Prime Minister Boiko Borisov, which resigned in November after his centre-right GERB party lost a presidential election. Borisov returned to office this month after GERB won a snap poll in March.

Prosecutors will now build their case against Mitov to try to bring a formal indictment leading to a court trial.

In the past year Bulgarian prosecutors, eager to improve the country's reputation as one of the most corrupt EU member states, have charged several senior officials with mismanagement, including former ministers of energy, health and defence. They have all denied wrongdoing.

(Reporting by Tsvetelia Tsolova; Editing by Alison Williams)

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