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FONDUL PROPRIETATEA: HIDROELECTRICA NEEDS A BOARD APPOINTED ON A FOUR-YEAR MANDATE
Following the proposals made by the Ministry of Energy on 31 March 2017 to set up another interim Board for a period of four months at Hidroelectrica, Greg Konieczny, Fondul Proprietatea CEO and Portfolio Manager, states:
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“We are disappointed that the Ministry of Energy chose to propose yet another interim Board at Hidroelectrica. What Hidroelectrica needs, as the most valuable Romanian company, is stability and predictability, as well as top professionals on its Board. The current proposal does not observe the corporate governance provisions of Law 111/2016, which establishes professional criteria and transparent procedures for the selection of members of the Supervisory Board in state-owned companies.
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We believe that another interim Board instead of a longer-term Board appointed according to Law 111/2016 will only prolong the instability and unpredictability for the company for another four months, thus putting the company at greater risk. A huge success story risks being jeopardized by short term visions.
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Additionally, maintaining the interim state of affairs at Hidroelectrica may severely hinder and delay its IPO. This is likely to result in diminishing the company’s value during listing and making investors less confident to invest in it and ultimately hurting its current shareholders – the Romanian State and Fondul Proprietatea. The Romanian citizen/ tax payer might be also consequently prejudiced.
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It is also our interpretation of the corporate governance provisions that if the Ministry of Energy is not ready just yet to appoint a Board for a four-year mandate the only other legal option was to extend the current Board’s mandate by another two months, this Board being already familiar with Hidroelectrica’s operations. We would like to reiterate that the 84 candidates that participated in the previous selection process could provide six strong candidates on a four-year mandate for the Board of Hidroelectrica.”
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Launched in December 2005, the Fund was established to compensate Romanians whose properties were confiscated by the former communist government. An international tender was announced in December 2008, and Franklin Templeton officially took over as investment manager and sole administrator of the Fund on 29 September 2010. The Fund is an alternative investment fund and its investment objective is the maximization of returns and per-share capital appreciation via investments mainly in Romanian equities and equity-linked securities. The Fund has been trading on the Bucharest Stock Exchange since 25 January 2011 and has been listed on the Specialist Fund Market of the London Stock Exchange by means of global depositary receipts ("GDRs”) on 29 April 2015.
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Starting with 1 April 2016, in view of complying with the EU Directive 2011/61 on alternative investment fund managers, the Fund is managed by Franklin Templeton Investment Services S.À R.L. (“FTIS”), a société à responsabilité limitée qualifying as an alternative investment fund manager under Article 5 of the Luxembourg Law of 12 July 2013 on alternative investment fund managers, authorized by the Commission de Surveillance du Secteur Financier under no. A00000154/21 November 2013, whose registered office is located at 8A rue Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B 36.979, registered with the Romanian Financial Supervisory Authority (“FSA”) under number PJM07.1AFIASMDLUX0037/10 March 2016.
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