Over half of the companies listed on the capital market have been fined by the National Securities Commission (CNVM), with the value of such penalties reaching a total 320 billion ROL (9.9 million dollars). The 2,638 companies fined were supposed to abide by transparency standards imposed by capital market legislation, but failed to meet this requirement.
The penalties were imposed upon companies that failed to send financial reports for the year 2003 to the CNVM or to the market they are traded on, the Rasdaq or BSE (Bucharest Stock Exchange). Companies that sent incomplete reports were similarly fined. Fines accounting for 0.5% of their share capital were imposed upon the 435 companies that failed to send complete reports, while the 2,203 companies that haven't sent any report received fines accounting for 1% of their share capital. Penalty ordinances issued by CNVM specify the next step will be to penalise the companies' management, should they fail to send reports within 30 days.
The major companies that were fined include Roman Brasov, facing a penalty of 29 billion ROL, Astra insurance company (15.7 billion ROL), Combinatul Siderurgic Resita (11.2 billion ROL) and the three listed companies controlled by LNM Holdings, namely Tepro, Siderurgica and Petrotub, whose combined fines amount to 16 billion ROL.
A representative of one of the penalised companies, Astra Asigurari, stated that the fine is "disproportionate."
"There may be an omission, but this is how things have been going for many years now and in our opinion there was no penalty due. We should rather have been called upon several times to submit the reports. We have submitted the balance both to the CSA and to the Ministry of Public Finances, so there was no problem. We will send the reports, but the penalty seems to us to be a brutal one, unadjusted to the real importance of the issue, since there are very few transactions with Astra stock on the Rasdaq market," explained Dan Domnitanu, vice-president of the insurance company.
CNVM has taken a different course of action this year as compared to 2003, when companies that had not sent their financial reports first received a warning with penalties coming afterwards. Fines were only issued for those companies that still failed to observe the market regulations in the wake of the warning.
2,200 companies received a warning last year, and about 750 companies were eventually fined. Penalties applied at that time amounted to a total of 1.1 million dollars. "This year, penalties have been directly imposed because companies had been warned since last year that they had to file their financial reports," says Ciprian Ene, CNVM spokesman.
vlad.nicolaescu@zf.ro
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