The skyrocketing prices in real estate, largely caused by foreign investors' interest around the time of Romania's accession to the European Union, have turned some of the management of companies privatised by the state after 1989 into millionaires, as their respective companies owned quite large plots of land in the centre of Bucharest.
An example is Timpuri Noi, the manufacturer of engines and turbines, which announced its intention to sell the 50,000 square metre plot of land on which the factory is located for 100 million euros.
Only three years ago, the employees of the company organised in an Association and bought around 70% in Timpuri Noi from the Privatisation Authority (APAPS) for 1.1 million euros.
"Nobody had anticipated back in late 2003 that the plot of land would eventually be worth so much. Early in 2004 we sold 5,000 square metres in Vitan for 36 dollars per square metre," says Adrian Breazu, the general manger of Timpuri Noi Bucuresti.
He estimates the price of land in the area stood at 40-50 dollars per square metre, which puts the value of the land in the centre of Bucharest at 2.5 million dollars.
Breazu says that the managers, along with department and section heads, own about 37% in the company as part of the Employee Association, a stake that is now valued at 23 million euros on the stock market.
The 36% shares owned by the Employee Association are now held by employees involved in production operations.
Ovidiu Bolboasa, the former manager of the company who was dismissed in 2005, had participated in the acquisition of the stake put up for sale by the state with more than 99% of the amount. Employees of the plant were outraged and convened at a meeting chaired by Ovidiu Bolboasa himself. Adrian Breazu recounts that at the meeting they decided to sack their manager and distribute the controlling interests among 277 of the more than 420 employees, who met the necessary requirements for buying shares in the company.
"We are still fighting Bolboasa in court, who is taking advantage of the five shares he owns in the company to challenge any decision we might make," says Adrian Breazu.
He adds that the privatisation contract required the management to commit to keeping more employees than the company needed at the time, and wages therefore weighed heavily in the results of the engine manufacturer, which posted 1.7 million-euro (6 million RON) losses last year, against a turnover of 2.7 million euros (9.5 million RON).
Timpuri Noi got a state aid worth almost 17 million RON (5 million euros), which, Breazu says, accounting for the debt the state had accumulated until the privatisation of the company, is money that will be used for investments and restructuring.
At the end of last year, Razvan Orasanu, former head of AVAS (State Assets Resolution Authority) said that individuals who are part of the management of the company had attempted five times to stop the monitoring of Timpuri Noi sooner, so that the Employee Association could be disbanded and the sale of the assets could take place.
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