Fights over the Supervisory Board of Transelectrica

The Romanian state, the majority shareholder of "Transelectrica", last week missed the two General Shareholder Meetings (AGA) of the company, which represents a rarely encountered situation at the company.

Among other things, the agenda included electing the members of the Supervisory Board, after the shareholder voted in July to switch Transelectrica to the dual management system.

Sources from the company said that the absence of the representatives of the majority shareholder can be explained by the fact that the power of attorney with the candidates for the Supervisory Board was not registered by the company on the day it was received (Monday, July 30th) and, that, for that reason, the procedure of the submission of the powers of attorney at least 48 hours before the General Shareholder Meeting was not honored. As a result, the applications for the Board were not validly expressed and no legally compliant decision could be made, our sources said.

Dumitru Beze, the president of the Association of Capital Market Investors (AIPC), attended the General Shareholder Meeting of on Thursday and said: "I do not know the reason why the representative of the state missed the GSM, but I can confirm that the list of candidates for the Supervisory Board should have been submitted at least 15 days before the GSM. And yet the list was only submitted on Monday".

The GSM shareholder meeting held on Thursday was legal, Mr. Beze claims, because the bylaws of Transelectrica stipulate that, if the GSM does not take place on the first summoning due to the quorum not being met (Wednesday), then a quorum of less than 50% will be needed on the second summoning to vote on the items on the agenda the items on the agenda.

According to the communiqué sent to the BSE by Transelectrica, in Thursday's general shareholder meeting, the current shareholders have given their principle agreement to the appointment of the members of the Supervisory Board, the duration of the term of the members, the remuneration, the amount of the professional liability insurance of the members of the Board, the form of the management contract, and the empowerment of one person to sign in the name and on behalf of the shareholders the management contract which will be concluded with the members of the Supervisory Board.

Transelectrica also announced that since the majority shareholder was absent from the GSM, items 8-13 of the agenda of the GSM for Thursday (concerning the Supervisory Board) have received the principle agreement, being voted as such by the present shareholders - The Proprietatea Fund (which owns about 14% of the shares of TEL), SIF Oltenia (about 5%), other small shareholders.

For their concrete approval, another general shareholder meeting will be summoned at a date to be announced later.

The unusual situation at the General Shareholder Meeting led to the appearance of several rumors circulating in the company: the absence of the majority shareholder could be justified by the fights for the appointments on the Supervisory Board; the introduction of the dual management system would make decision-making harder in the company and some people don't want it; the list of the members of the Supervisory Board was not registered on time because Mircea Ciopraga, the president of the current Board of Directors, does not appear in the future management structure.

Remus Vulpescu, the president of the OPSPI, resigned one month ago, from the Board of Directors of "Transelectrica" because he was "motivated by the speculation concerning a potential kinship and/or economic relation between another member of the Board of Directors of the company and any person involved on a decision making level in any of the entities participating in the contractual bilateral relations with Hidroelectrica SA", as he announced at that time.

Mr. Vulpescu said he was referring to the relationship between Mircea Ciopraga and businessman Bogdan Buzăianu, considered one of the "clever boys" in the energy industry, owner of "Energy Holding". He thinks that there could be a 50-50% chance of this information being accurate.

At the time, the head of the OPSPI expressed his hope that the allegations about Ciopraga were unfounded.