Financial investment companies (SIFs) have bought significant amounts of their own shares, indirectly, through companies they control, even though their shareholders did not sanction the move, as required under law.
Moreover, the companies in question, which include Turism Felix, Santierul Naval Orsova (Orsova Shipyard) and Biofarm, will not have the right to receive dividends for the shares they bought, and will not be allowed to vote during General Meetings at the SIFs they control, either.
Besides the fact that these transactions were an uninspired move and caused significant losses to the companies in question, and indirectly to the SIFs over the last few months, the legality of such transactions is questionable.
The companies controlled by SIFs, or those in which the SIFs are significant shareholders, control at least 13 million shares worth more than 7 million euros. The SIFs' companies are not required to reveal their interests in other companies, which could mean the actual value is even higher.
"The subscribing, acquiring or holding of shares of a joint-stock company by another company in which the joint-stock company owns either directly or indirectly most of the voting rights or whose decisions can be influenced significantly by the joint-stock company, shall be regarded as being performed by the joint-stock company itself," stipulates the trading companies' law. In addition, own shares do not give voting rights or the right to collect dividends, for that matter either, outlines the same law.
Most of the SIF stakes were bought by the companies controlled by SIFs at the end of last year. The acquisitions have somewhat slowed down in the last few months, after the Bucharest Stock Exchange and the SIFs implicitly plummeted. SIFs have lost one third of their value since the beginning of the year.
In addition, under the same law, "authorisation for acquiring own shares is granted by the extraordinary general meeting of shareholders, which sets the conditions for the acquisition, especially the maximum number of shares that can be acquired, the duration for which the authorisation is granted (...) and in case of an onerous acquisition, their minimal and maximal value".
When asked by ZIARUL FINANCIAR, representatives of the National Securities Commission refused to comment on the legality of the operations conducted by SIFs.
"We believe that a joint stock company controlled by a financial investment company may acquire shares in that respective SIF and still observe the stipulations of Law 31/1990, of Law 297/2004 and of the CNVM Regulation 15/2004," the representatives of CNVM answered. They, however, referred to the stipulations of the trading companies' law that assimilates the acquisition of shares in a parent company that acquires its own shares.
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