Prosecutors launch probe into transactions with SIFs

The prosecutors with the National Anticorruption Department (DNA) have started a probe into the transactions conducted with the financial investment companies’ (SIF) shares on the Bucharest Stock Exchange last year. Both the National Securities Commission (CNVM) and the Bucharest Stock Exchange, which could have supplied information about the transactions, say that they not only did not report anything about this to the prosecutors but also know nothing about any probe.
“A criminal investigation is being conducted by the DNA into a series of transactions conducted with the SIF shares on the Bucharest Stock Exchange last year,” the DNA officials said in reply to ZF’s request for comment.
They added that under the law they were not at liberty to reveal the identity of those subject to investigation, the potential crimes they might be charged with or the name of the person who told the institution about this. The case was in the preliminary documents stage (verifications) at the moment, the DNA representatives said.
Sources familiar with the investigation say it is mainly about the transactions on March 28 last year.
That day Parliament decided to modify the emergency ordinance on the SIF stake cap, by applying a 1% cap for the groups of persons acting in concert, which was bad news to the investors on the Stock Exchange, because the new regulation could be safely assumed that it would make some of the investors lower their stakes in SIFs by selling shares on the market and thus driving the prices down.
The result of the Parliament voting was announced around 12.45 and then investors started to sell. The Stock Exchange decided to suspend the SIFs from trading at 13.05, yet in the 20 minutes between the announcement of the decision in Parliament and the suspension from trading, the SIFs plummeted, losing up to 8% of their value, as a result of the panic caused by the news. The fall continued the next day, as well, after trading was resumed and after every investor had learnt what the MPs had voted. The quotes later rebounded.
The Senate chairman, Nicolae Vacaroiu, yesterday stated that the Senate’s Permanent Bureau had received a request from DNA’s Section II prosecutor Doru Tulus for information about how UDMR (Democrat Alliance of Hungarians in Romania) Verestoy Attila voted a law draft.
Sources with the Permanent Bureau of the Senate were quoted as saying by Mediafax that the law draft in relation to which Doru Tulus requested information on the vote of Senator Verestoy Attila was connected with the SIFs. Vacaroiu explained that the request had been extensively debated by the Permanent Bureau in a meeting, and the members of the Senate leadership who were legal experts had dismissed the prosecutor’s request as a case of “abuse of office”.
The emergency ordinance raising the SIF stake cap from 0.1% to 1% was approved in the autumn of 2005 at the request of the Finance Minister Ionut Popescu, and the regulations led to a significant increase for the SIFs.
It is not clear, however, why the anti-corruption prosecutors have launched a probe into these transactions.