"GOOD LORD. GOOD LORD, GOOD LORD!..." The investigation of the DNA against RCS&RDS is advancing and it is inconveniencing the price of DIGI shares

The National Anti-Corruption Department yesterday announced the placing of Ioan Bendei, vice-president of RCS&RDS under court supervision for offering bribes and complicity to money laundering, and a seizure of 13.7 million lei of RCS&RDS assets, in the case concerning the assignment of the broadcasting rights for football matches of Romanian soccer League I.

Even though the actions in question go back to 2011, the DNA prosecutors seem to have picked up the pace after American investors announced their intention to exit the company.

The DNA launched the criminal investigation against "RCS&RDS" and two of its administrators just during the IPO of its parent company "Digi Communications", and later announced that Serghei Bulgac, CEO DIGI and RCS&RDS as a suspect on the very day the company got listed.

Even though Serghei Bulgac said that he did not see any withdrawals from those investors who subscribed in the DIGI IPO, following the DNA investigation, it still ended below the price of 40 lei/share, nearer to the lower bracket of the 38-56 lei/share price range.

Hurt on the second trading day by the announcement of the indictment of CEO Serghei Bulgac, DIGI stock has rarely risen above the IPO price so far, and Raiffeisen, the stabilizing agent for the DIGI stock price, intervened in the market by acquiring shares.

The announcement of the indictment of Ioan Bendei was also published on the BSE website, after the closing of the trading session.

DIGI Communications has announced: "The DNA has taken the precautionary measure of a seizure of some assets that belong to RCS & RDS S.A. (the subsidiary of the Company) up to the limit of 13,714,414 lei (approximately 3 million Euros). If RCS RCS & RDS SA is found guilty of the alleged crimes under investigation through a definitive court ruling, these assets may be foreclosed upon up to the limit of the amount that is the object of the seizure.

Also on June 7th, 2017, concerning Mr. Bendei Ioan, a member on the Board of Directors of RCS & RDS SA, the DNA has decided to start prosecution on charges of offering bribes and complicity to money laundering. Also, concerning Mr. Bendei Ioan, the DNA has decided court supervision for a period of 60 days, starting with June 7th, 2017. Following the institution of such a measure, Mr. Bendei Ioan is subject to certain obligations and restrictions on communication.

The necessary steps will be taken so that none of the actions mentioned above significantly affect the activity of RCS & RDS SA or of the company ".

Ioan Bendei doesn't hold any position with DIGI Communications, but he is the vice-president of RCS&RDS, according to the DIGI prospectus.

DIGI shares yesterday closed at 40 lei/share, up 0.5% over Tuesday, but below the level of 40.2 lei/share where it stood around 15:50, when information about the new DNA press release appeared.

It is interesting that the prosecutors are stutter stepping their announcements in the investigation against RCS&RDS, and have not taken any measures against the representatives of the company en masse. As Ioan Bendei was placed under court supervision one month after his indictment, it is not out of the question that the DNA to announce other measures against other officials of the company.

Prosecutors did not disclose the new findings after this additional month of additional research, but the frequency of the press releases in this particular case is obviously higher than in other cases and certainly causes surprise.

Perhaps the reaction of Ioan Bendei would be similar to that he had in the conversation with RCS&RDS owner Zoltan Teszari, when Teszari told him that he was visited by "Mr. Traian and Raducu". At the time Bendei went overboard in acting shocked: "Good lord, good lord, good lord ..."

Immediately after the listing of DIGI on the BSE, Antena 3 presented audio recordings in which Ioan Bendei calls his secretary to send "phones and operators to install them" at three residences of the judicial police officer Iordăchiţă Teodosia Elena.

Also, Antena 3 has presented recordings with Ioan Bendei and Zoltan Teszari, the owner of RCS&RDS. The TV network hinted that the names mentioned by Teszari - "nea Traian and Răducu" - refer to Traian Băsescu and his son-in-law, Radu Pricop, but both Zoltan Teszari, as well as the former president have denied it.

Also indicted in the case investigating the assignment of the broadcasting rights for the football games of the Romanian 1st league are SC "Bodu" SRL for complicity in taking bribes and money laundering and "Integrasoft" SRL (which at the time the deed was committed was owned by SC "RCS&RDS" SA), for complicity to money laundering.

Yesterday, the DNA seized the assets of "BODU" SRL (up to the limit of the amount of 16,771,659 lei).

On May 5th, the anticorruption prosecutors have decided, in the same case, to begin prosecution and the placement under court supervision for 60 days against Dumitru Dragomir, former president of the Professional Football League, accused of money laundering and complicity to money laundering.

The anti-corruption prosecutors have also decided, in the same case, to continue the prosecution of Alexandru Oprea - who at the time of the alleged offense was the CEO and president of the Board of Directors of the same cable TV company, for complicity to offering bribes, Mihai Dinei - at the time of the alleged offenses coordinator of the legal activities of the same cable company, for complicity to offering bribes and money laundering, Florin Bogdan Bădiţă - at the time of the alleged offenses administrator of a company, complicity to offering bribes and money laundering, as well as against Bogdan Dumitru Dragomir - at the time sole shareholder of the same company, for complicity to offering bribes and money laundering.