"Franklin Templeton", getting closer to taking over the management of the Proprietatea Fund

If the Parliament validates the amendments of the Ordinance 81/2007 concerning the operation of the Proprietatea Fund, the only step left for "Franklin Templeton" to take over the management of the Fund will be the summoning of the latter"s General Shareholders" Meeting, lawyer Corin Trandafir, member of the board of the Fund, said for BURSA.

Last Tuesday, the Legal Commission of the Chamber of Deputies voted in favor of the amendments proposed by Ordinance 81. As a result, any further changes to the Articles of Incorporation of the Proprietatea Fund will no longer require a Government bill. The new articles of incorporation include provisions concerning the procedures for the management of the Fund and appoint "Franklin Templeton" as the Fund"s manager.

"I think the two houses of the Parliament will approve the amendments as well. And I say this because the amendments were unanimously validated by the Budget and Finance Commission of the Chamber of Deputies and during the vote in the Legal Commission of the Chamber of Deputies there was only one abstention", said Corin Trandafir.

Even though Mark Mobius, the chairman of "Franklin Templeton", warned two weeks ago that it is unlikely the Proprietatea Fund would be listed this year, Corin Trandafir is a little more optimistic: "The manager of the Fund will be the one to decide on the best moment for the listing of the Fund. However, I think that Mark Mobius was trying to issue a warning against missing the initial deadlines for switching the management of the Fund and for its listing when he mentioned a delay of the latter was possible".

The most important amendments of the Ordinance 81 include the elimination of the requirement to list the Fund via an IPO, as well as the cancellation of the 500 million shares which were subscribed by the state but were not paid in. The cancellation of these shares will allow the Fund to pay out dividends to its shareholders, out of the profits of the last two years.

• The state could earn 654 million lei in dividends

The Proprietatea Fund had a profit of around 730 million lei in 2009 and 424 million lei in 2008. According to the law, the Proprietatea Fund is required to pay out at least 50% of its profit in the form of dividends. There were rumors going about that the state would like the entirety of the fund"s profit to be paid out as dividends.

If he amendment concerning the cancellation of the shares in the Fund subscribed by the state but unpaid were to get through the vote of the Parliament, the Fund could pay out dividends for the last two years.

If the Proprietatea Fund decided to distribute the entire profit of the last two years as dividends, the Ministry of Finance, which controls 56% of the shares of the Fund, could receive dividends amounting to a maximum of 654 million lei.