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Gov't approved Sovereign wealth funds to be organized as joint-stock companies
The government has approved the legal framework for the establishment of development and investment sovereign wealth funds, which will be organized as joint-stock companies, under terms to be established separately under government decisions, and which will be managed in a dualistic system by a Supervisory Board and a Management Board.
"Every sovereign wealth fund - as this is about an emergency ordinance to set the legal framework in place for the establishment of several sovereign wealth funds, on a case-by-case basis, (...) will provide Romania with cost-effective and sustainable investments in development areas, or areas that need development and investment," Finance Minister Eugen Teodorovici told a press conference at the Victoria Palace of Government on Thursday.
The development and investment sovereign wealth funds will make a decisive contribution to the development of Romania's economy by "providing an alternative source of funding for important investments in infrastructure, industry or capital markets," the minister added.
"These sovereign wealth funds will be organised as Romanian joint-stock companies, under organization and functioning terms to be established separately through government decisions. The funds will be managed in a dualistic system by a Supervisory Board and a Management Board, in accordance with the provisions of Law No. 31/1990. The members of the Supervisory Board are appointed by the General Shareholders Meeting for a term of 5 years and must fulfill the following selection criteria: financial-banking expertise required for the fulfillment of the specific responsibilities of the sovereign wealth funds, experience in corporate management, professional integrity, good repute, knowledge, skills and experience appropriate to the complexity of the specific activity of sovereign wealth funds," Teodorovici explained.
The scope of these funds is not privatization, but financial investments in their own name and account, and developing and financing profitable and sustainable investment projects, by participation in public-private partnerships included, as well as managing their own financial assets with a view to making profit, the Finance Minister said.
Teodorovici also mentioned several possible areas of activity for the future sovereign wealth funds: "Business financing at various development stages, including start-ups, financing Romanian companies of strategic importance and pursuing the energy strategy, investments in industry and infrastructure projects, increasing the competitiveness of the Romanian economy, stimulating innovation and new technologies, creating sustainable, geographically and economically sustainable jobs, developing long-term human and social capital and capital markets."
The FinMin also said that in the version adopted by the government, the Emergency Ordinance includes the requirement for the fund companies to comply with the rules of corporate governance.