A NEW CONTROVERSIAL INITIATIVE BY BÎLTEANU The Board of Directors of SIF Banat-Crişana has decided to reduce the share capital of the company

• SIF1 had previously been sued for not lowering its quorum requirements for the General Shareholder Meeting

The Board of Directors of SIF Banat-Crişana has decided to reduce the share capital, based on an article of the company's articles of incorporation, according to a report sent to the Bucharest Stock Exchange.

SIF1 stipulates that it will make public all the details of the operation following the approval of the operation by the Financial Oversight Authority (ASF).

The Board of Directors of SIF Banat Crişana made that decision based on article 6, paragraph 8 of the Articles of Incorporation (see insert).

The website of SIF Banat Crişana states that the Articles of Incorporation were rewritten on July 2nd 2013.

As SIF1 only announced its decision on the BSE yesterday at 17:00 hours, the market specialists did not have time to study the issue, so they only expressed their opinion based on their own impressions.

The most frequent opinion was that the delegation of the decision of the Board of Directors to cut the share capital of the law would go against the law. The best experts consider that the decision to reduce the share capital may only be made through an Extraordinary General Shareholder Meeting. Thus the plan would first of all be faced with the difficulty of meeting the quorum of the AGEA (a quorum of 75% on the first summons, and 50% on the second) and only secondly, the possibility of the ASF not approving such a decision, according to some market voices.

Some market experts are wondering when were the articles of incorporation of SIF Banat Crişana changed, to allow the delegation of cutting the share capital to the Board of Directors, when no Extraordinary General Shareholder Meeting was held.

Besides, for the same purpose of facilitating the cut of the share capital, SIF1 has tried to lower the quorum requirement for the General Shareholder Meeting, but in August, the ASF rejected the request of the Board of Directors of SIF Banat-Crişana (SIF1).

The request for authorization had been filed in in order to adapt "the articles of incorporation to the new provisions of the stock market, comprised in Emergency Government Ordinance no. 32/2012 for the collective institutions that invest in securities and the investment management companies".

In fact, in September, Monticlifti Management Limited SRL sued SIF Banat Crişana, in order to force it to abide by the dispositions of Emergency Government Ordinance (OUG) 32/2012, concerning the amendment of article 6, paragraph 18 of the Articles of Incorporation of SIF1, towards amending the quorum and voting majority requirements for holding the Extraordinary General Shareholder Meetings, according to article 115 of the law 31/1990, articles 80,201,202 of Government Emergency Ordinance (OUG) 32/2012, article 120 of the Law 297/2004 and article 19, paragraph 2 of the Articles of Incorporation.

According to Emergency Government Ordinance 32/2012, the General Shareholder Meeting will be held in compliance with the provisions of the Law 31/1990.

The provisions of the law of companies require a quorum of 25% of the voting rights upon the first summons, and of 20%, respectively on the second summons, for the Extraordinary General Shareholder Meeting. These only apply for SIF Transilvania. The articles of incorporation of the other four SIFs, specifically SIF Banat-Crişana, SIF Moldova, SIF Muntenia and SIF Oltenia, stipulate quorums of 75% of the voting rights are needed on the first summons, and 50%, respectively, on the second summons.

In February, when SIF Banat Crişana announced its intention to acquire SAI Muntenia Invest, the manager of SIF Muntenia, some voices claimed that this operation was prohibited by its articles of incorporation.

At the time, SIF1 told us that the provision which prohibited the SIF from owning asset management companies had been abrogated, and told us that we should take into account the fact that the Articles of Incorporation of SIF Banat-Crişana, in Art. 19 (2), stipulates the following: "for any laws and regulations subsequently published that eliminate or restrict the current limitations expressly stipulated for the SIFs, the clauses of the current articles of incorporation will be considered as amended by law".

Considering that, meanwhile, SIF1 has taken over SAI Muntenia Invest, the management policy of "Banat Crişana" could affect SIF Muntenia too.