The SIF mutant kicking its legs

Financial Investment Companies (SIFs), this undesirable mutant of Romanian politics – because they have absolutely nothing to do with economics – have succeeded, with priceless help from our “eternal and fascinating” legal system, in virtually freezing the privatisation of Banca Agricola, a structure demolished by politics, rescued economically on the very brink by the populace, with purchase bids available from abroad. As the popular saying goes, “Once a lowlife becomes a king, he first kills his father.”

What are these SIFs, after all? An absurd law – unparalleled in its absurdity and serious implications throughout the entire system of transition economies, in fact, the world over – has established that, out of everyone’s and therefore no one’s economic patrimony inherited from communism, a share should become “privatisable,” which is why companies representing this quota were renamed “commercial companies,” were permitted autonomy, and, let’s say it openly, pending an eventual privatisation, were left entirely without an owner. Why?

Because the law was not stating exactly who was the owner and what were the owner’s responsibilities, seventy percent of the capital went to the shareholder called the SOF, and out of the remaining 30%, capital would be distributed free of charge to the adult populace of the country. And because shares could not be distributed directly, five institutions were concocted, called Private Ownership Funds (FPPs), tasked to manage this 30% stake until the distribution was complete. Had the transformation taken six months, it would not have been a problem. But since the law deliberately omitted to state a time limit, the people who grabbed a chair at the FPPs by virtue of the political algorithm were interested in making the process as lengthy as possible. And for five long years, they stuck in deeply, bought themselves expensive cars, built luxurious offices, on people’s money, of course. Without giving any dividend to the people, who were entitled to dividends because they, the adult population, were in fact the shareholders.

Even worse. When the so-called mass privatisation ended, these structures, which at long last appeared useless, although they had been useless since day one, turned into SIFs, that is, into financial investment companies, and private ones to that! What do you mean, private?! They were established by a gift from the state, in other words, from the poor populace, they gave nothing back to the populace, and now a few opportunists are acting like capitalists? This time it’s serious, they are doing it legally!

SIFs represent the greatest laugh in the face of the Romanian people and the shame of Romanian capitalism. Capitalism by gift from the state, that’s no capitalism! A mutant, worse than a private structure set up by direct theft, because the thieves at least put some work into it. SIFs did not move a finger. Instead of saying SIFs are right, the judicial system should look into the constitutionality of these structures, since we are supposed to be protecting private ownership and heading towards the European Union or NATO! What came to those who exchanged their privatisation vouchers for SIF shares? There are so many private structures that are barely breathing, oppressed by unfriendly laws and ruining taxes. Whereas SIFs are doing well, they don’t need to show any management skills or ability in capitalising on market conditions. Because they’ve set up their own regulations that make them sealed and storm-proof citadels, which occasionally dispatch an explosive charge into the state that made the gift and the populace that bears it.

Their primary weapon is blackmail with their stakes in banks, which they received as part of the gift years ago. Which they did not put up when privatisation vouchers were exchanged for shares. Because, in the five years of managing people’s property without giving anything away, they used the money they gained to consolidate solid portfolios in banks. And SIFs did not accept any compensation exchanges of stock with the SOF, as the initial banks privatisation law said, for no other reason than to ease the process. Now, however, when inefficient and reckless management brought so many banks to difficulty, if not bankruptcy, SIFs are pretending to have forgotten their own position, unwilling to accept as shareholders the losses of the banks they hold stock in. What do the SIFs actually want with Banca Agricola? Nothing but avoiding the losses which every other shareholder is suffering with the bank. Their impudence is boundless when they ask the SOF, that is, all of us (fools), to write off these losses, asking instead for shares in the BCR or Banc Post, both profitable state banks.

How long will the Romanian society be able to stand such aggression, after the economy has been knelt already? The SIF mutant needs to be shoed!