Fondul Proprietatea concerned about draft proposing exemption of state-owned companies from corporate governance

Fondul Proprietatea expresses significant concerns about a new legal draft, currently discussed in the Commitees of the Chamber of Deputies, which proposes the exemption of 100 major state-owned companies (SOEs) from the enforcement of corporate governance legislation currently in force. Some of the most valuable Romanian SOEs, operating in vital sectors, are targeted, including: Hidroelectrica, Nuclearelectrica, Bucharest Airports

2018-09-24 14:06:02

Fondul Proprietatea is appalled that the amendments are largely the same as those declared unconstitutional by the Constitutional Court in February 2018. The plenum of the Chamber of Deputies may vote on the issue this week.

If adopted in its current form, the exemption of 100 state-owned companies from corporate governance would represent a major step back in terms of economic credibility, according to FP representatives.

Commenting on the particularly severe implications of this proposal, Johan Meyer, CEO of Franklin Templeton Investments Limited and Portfolio Manager of Fondul Proprietatea said: "State-owned companies are owned by all Romanians who are perfectly entitled to have access to information on their situation and evolution. If corporate governance exemptions are adopted for so many state-owned companies, there will no longer be any obligation for them to periodically report any financial or operational information. We will most likely enter an era of total darkness in which we will no longer know anything about the performance of the SOEs, apart from learning a year or two down the road that some of the most successful Romanian companies, will then be on the verge of insolvency and we would be left wondering what happened in the meantime. This would be similar to letting Ali Baba's 40 thieves into a bank vault, switching off the lights and the alarm system and then pretending to be surprised at the outcome. I am amazed that such a detrimental action would even be considered in view of Romania's objective of becoming an Emerging Market country."

Fondul Proprietatea urges the Parliament to carefully consider the major negative impact of these exemptions and decide against adopting this infamous black-list of companies excepted from corporate governance.