CNVM head charged with revealing confidential trading information

Anti-corruption prosecutors have officially indicted National Securities Commission (CNVM) chairperson Gabriela Anghelache in the case of the privatisation of the Bucur Obor shopping complex in Bucharest.

The CNVM chairperson stands accused of being complicit to the abuse of office in respect of the trading on the capital market of a number of Bucur Obor shares.

The last person to have been accused in the same case, on March 22, was Mirel Tariuc, the former CNVM chairman.

Anghelache has been charged with allowing unauthorised persons to gain access to information that was not publicly available in the Bucur Obor case, the National Anti-Corruption Prosecutor”s Office (PNA) says.

According to the institution”s Press Bureau, the prosecutors working for the department and handling corruption-related crimes initiated the prosecution against Anghelache for “being an accessory to commercial or financial operations conducted by a private economic operator, allowing unauthorised persons access to information that was not publicly available, partnership in wrongdoing, abuse of office in order to trespass against public interest and individual interest, forgery of private documents and fraudulence,” in connection with the privatisation of the Bucur Obor shopping complex.

During 2000 Anghelache was the CNVM vice-chairperson. She allegedly illegally ordered the “lifting of SC Bucur Obor SA”s suspension from trading for a few minutes such that 7.4% of the company could be sold on the RASDAQ market to Bucur Obor shareholder Laurentiu Postovaru (also being prosecuted in this case).”

In effect, during SC Bucur Obor SA Bucuresti privatisation process the Shareholder Association bought 40% in the company from the State Ownership Fund and then received a further 7.4% of the total voting rights in two stages.

In June 2000, Postovaru filed a petition with the CNVM requesting that those transactions be cancelled through which the Employee Association acquired the respective stake from the market. As a result of this petition, by means of an ordinance, signed by chairman Alexandru Mirel Tariuc and endorsed by vice-chairperson Gabriela Anghelache, the CNVM ordered the cancellation of all the transactions through which the Employee Association acquired Bucur Obor SA shares via securities firms.

The CNVM ordinance came into force on June 27, 2000, with the securities firms that sold the shares to the Employee Association not being in possession of any sell orders signed by the legal holder of the shares. Moreover, it should not have been possible to conduct trading, with the company having been suspended and the shares pledged as collateral with banks until the Employee Association repaid the loan it had taken out for their purchase.

Following this transaction, Postavaru, who had taken advantage of the CNVM”s support, purchased 904,144 shares in SC Bucur Obor SA, prosecutors say.

The CNVM later instructed the Romanian Shareholder Registry to unfreeze those shares and place a restriction on their being traded for 12 months as of November 2, 2000.

vlad.nicolaescu@zf.ro

TITL: Isarescu tries to allay fears over deregulation

Razvan Voican

“Don”t be too frightened,” said NBR Governor Mugur Isarescu yesterday, the first day on which non-residents were allowed to open deposit accounts in ROL and exchange foreign currency to take advantage of the still high levels of interest.

On the forex market there was a slight decline in the value of the euro, which fell towards 36,000 ROL, though this was more a result of the game being played by the banks, than being due to sell orders from foreign investors rushing to make money off the deregulation.

“The idea of catastrophic capital inflow/outflows is a bit exaggerated. We are not taking this lightly and, while we are not expecting massive foreign currency inflows, we are ready to react with a mix of exchange rate and interest rate policies, as well as by resorting to the safeguards announced,” Isarescu said.

He added that the opening of the market to foreigners was not an easy moment for a country that had faced a lack of foreign currency for more than ten years and with the ensuing constant depreciation of the domestic currency.

“This was just another day on the market. I saw attempts to create panic and volatility by some players, but nothing happened. The volumes were higher than last week and the market was livelier in general. The exchange rate will probably continue to fall over the next few days, though at a more moderate pace,” a dealer said.

According to some estimates, including those of the central bank, an amount of one to two billion euros entered the market last year using loopholes to take advantage of the ROL interest rates, which were much higher than in the West, even before the deregulation.

This capital can thus be considered speculative, though the NBR Governor believes not all this money will behave as such, i.e. it will not rush to leave once the gains sought for have been made.

“Not all this capital will leave; it will instead move towards other placements, such as real estate or long-term investments,” Isarescu said.

He went on to say that the Romanian market needs to know how to deal with the abundance of cheap capital in order to be able to benefit from it.

razvan.voican@zf.ro