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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:

  • “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.

  • 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.

  • 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.

  • 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.

Franklin Templeton established an office in Bucharest in May 2010, with a team of 32 employees, including 6 locally based investment professionals who are further supported by the over 40 portfolio managers and analysts of the wider Templeton Emerging Markets team.

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.

This release herein is issued by Franklin Templeton Investment Management Limited (“FTIML”), registered with the FSA under no. PJM01SFIM/400005/14 September 2009, which is authorized and regulated in the UK by the Financial Conduct Authority, registered therein under the number 121779, registered as a foreign equivalent of an investment adviser with the US Securities Exchange Commission. FTIML acts herein as a delegate of FTIS with respect to the portfolio management functions as well as administration services over the Fund.

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 180 countries. Through specialized teams, the company has expertise across all asset classes—including equity, fixed income, alternative and custom solutions. The company’s more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in 35 countries, the California–based company has more than 65 years of investment experience and over $738 billion in assets under management as of February 28, 2017.