CNVM cancels Gelsor

The National Securities Commission (CNVM) decided to cancel the activity of Gelsor Foreign Currency Fund (FVG) claiming that the fund’s number of investors does not comply with the current legislation.

The fund’s managers say they are puzzled by this decision, stating their commitment to defend Gelsor functioning even through lawsuits.

“While CNVM had previously authorised the fund’s operations, it seems now that they have changed their minds and suspended it without any apparent reason,” said Ilenuta Panzariu, director with Gelsor Asset Management, the company that administers the fund.

“I can hardly understand why CNVM wants to liquidate FVG right now, when a World Bank research supports this innovation in Romanians’ savings. Small investors, who save money, should enjoy the same benefits as the significant players from the financial markets. Who could be against this idea?” Ilenuta Panzariu stated.

She says that these funds are largely supported in other countries, as they help keep the population’s savings in the country.

CNVM argues that the number of FVG investors is lower than the minimum level of 500 members the fund should have had at the beginning of 2001, after one year of activity.

“Gelsor Foreign Currency Fund at the beginning of this year should have proved it had more than 500 investors. Though the fund’s records reported more than 2,000 investors, only 65 persons held more than one investment unit.

The rest of them withdrew their money and most of them had amounts of 10-15 cents, which do not enable them to be considered investors,” Ileana Agalopol, CNVM commissioner, said.

She added that, under such circumstances, the managing company should have asked for the investors’ opinion regarding the fund’s liquidation or restructuring.

The managing company contested CNVM decision to the Bucharest Court of Appeals and demanded its cancellation, but lost both lawsuits, sources within CNVM say.

Under such circumstances, Gelsor Asset Management may further contest this decision at the Supreme Court of Justice over the next 30 days.

CNVM sources told Ziarul Financiar that the managing company failed to attach the entire list with the fund’s investors to the contestation submitted to the Bucharest Court of Appeals.

“Moreover, in the reports submitted to CNVM, personal data, addresses and other identification information about the existing investors do not match,” the above-quoted sources specified.

Gelsor Foreign Currency Fund also experienced some troubles when it was launched, as the National Bank of Romania (NBR) claimed the fund’s operations did not comply with the foreign exchange regulations.