A scandal fatal to the head of the Warsaw Stock Exchange

• The shareholders of the Warsaw Stock Exchange will decide the fate of Ludwik Sobolewski as head of the Stock Exchange, on January 17th

• Adam Maciejewski, likely to take over the position of CEO

• Patrick Young: "The reputation of Poland and that of the WSE will not be harmed by this banal incident"

The shareholders of the Warsaw Stock Exchange are being summoned on January 17th to decide on the replacement of the management, after CEO Ludwik Sobolewski was suspended at the end of December.

The Warsaw Stock Exchange said, in a press release, that there was "no special reason" for the suspension.

The Polish media has speculated, however, that the reasons would be tied to a conflict of interest. According to the Polish publications, Ludwik Sobolewski had involved the WSE in a fundraiser for financing a film which would feature his girlfriend, Anna Szarek.

It seems that, following an internal audit at the Stock Exchange, Sobolewski was asked to resign, but he refused.

Subsequently, the Ministry of the Treasury of Poland asked the Anti-corruption Office to conduct an investigation for abuse of office against Ludwik Sobolewski.

Sobolewski's duties were taken over by Adam Maciejewski, a member of the Board of Directors, who is expected to remain at the helm of the Board after the General Shareholders' Meeting.

Patrick Young, Executive Director of consulting firm DV Advisors, commented for "BURSA": "This is an unfortunate footnote to the sensational growth of the WSE after the fall of communism. There are good managers at all the levels of the WSE and CEO Adam Maciejewski is certainly a strong candidate to take over the reins after an otherwise very successful period for Ludwik Sobolewski and founder Wieslaw Roslucki. Poland remains the strongest equity market of the new Europe and the reputations of the country or of the Stock Exchange will not be affected by this relatively trivial incident".

The Warsaw Stock Exchange was privatized in 2010, but the Ministry of the Treasury holds the majority of voting rights, therefore it is possible that the dismissal of Sobolewski has political connotations.

Ludwik Sobolewski visited Bucharest in July 2012, to discuss the possibility of dual listings, as the Romanian government's plan to list several of the companies it owned on the BSE was of actuality at the time. An important topic on the agenda was the listing of the Proprietatea Fund on the Warsaw Stock Exchange.

This year, the WSE had 94 initial public offerings (IPO), including 16 on the regulated market, worth 1.2 billion Zloty, and 78 on the New Connect alternative system, worth 120 million zloty (see charts).

On the WSE, 46% of the trading volume is generated by foreign investors, while the Polish institutional investors account 35%, and local retail investors generate 19%.