Istvan Sarkany, candidate for a seat in the FP Representative Committee: "The state seems to want to block the listing of companies from the fund's portfolio"

Fondului Proprietatea must have a clear management strategy that will benefit all shareholders, says Istvan Sarkany, investor and candidate for a seat in the FP Representative Committee in the September 27 elections.

Istvan Sarkany told us: "Retail investors have come to have more than 50% of Fondul Proprietatea, so I think the time has come for someone to represent their interests, to have a say in the direction in which it goes the fund. We need to see the administrator's intentions and, if they are to our benefit, promote them, and if not, try to find solutions that bring value to all Fondul Proprietatea shareholders.

The investor added: "From the items on the agenda of the meeting on September 27, it appears that the state wants another administrator at FP who has a strategy based on investments, but we do not know what this strategy is and whether it is to the advantage of small shareholders . For now we see that the state wants FP to stop doing share buybacks and seems to want to block listings of companies in the fund's portfolio. But what will happen to these companies, which remain stuck in the hands of an administrator we don't even know at the moment. Let's not forget that the state tried to harm the Proprietatea Fund by increasing the capital of the Aeroporturi Bucureşti company, which, if it had not been annulled in court, would have been detrimental to the small shareholders of FP".

In the year 2021, the Ministry of Transport, as the majority shareholder of Bucharest Airports, decided to increase the company's share capital, from 143.8 million lei to 4.91 billion lei through contribution in kind, namely the land of Baneasa Airport. But Franklin Templeton, the administrator of Fondul Proprietatea contested in court the valuation of the land of 3.8 billion lei, which was 11 times higher than the previous valuation of 336 million lei. If the capital increase had been implemented, FP's stake in Bucharest Airports would have been diluted from 20% to 0.7%.

• "There is talk of investments, but we need to know clearly if they can bring a greater benefit to shareholders than the current strategy", says Sarkany

The candidate in the FP Representative Committee emphasizes that the fund must have a clear management strategy. "We are talking about investments, which is fine, but we need to know clearly what opportunities exist, what potential returns they would have and whether they can bring a greater benefit to shareholders than the current strategy. We have no such information at the moment, but everything is a nebula. On the other hand, we have some concrete things, for example some companies that can be listed. And if no investments with higher returns are found, let's continue with the buybacks which, considering the discount between the price and VUAN, have returns of 40-50%, even 70% if we consider the offer that FP is running in this period. It is very difficult to find investments with higher returns", says Istvan Sarkany.

The candidate in the FP Representative Committee added: "Small investors must have a say in the management of the fund, we have enough votes and the possibility of online voting (through the eVote platform) to delegate at least one representative to the Fondului Proprietatea Committee. My only goal is to have a clean stock market that can be trusted and that will bring value, over time, to shareholders."

• FP shareholders will vote on Franklin Templeton's one-year term extension or the election of a new administrator later this month

Fondului Proprietatea shareholders will vote, at the September 27 meeting, to extend Franklin Templeton's mandate by one year, from April 2025 to March 2026, or to elect a new administrator, for a period of two years.

At the request of the Ministry of Finance, which at the end of August controlled almost 11% of FP's voting rights, points were introduced which assume that administrator Franklin Templeton will no longer be able to buy back his own shares and preserve FP's current portfolio, that is, the fund will do not sell from holdings. In justifying the requests, the Finances claim that the measures are necessary to establish the new investment policy of Fondul Proprietatea, taking into account the interests of the shareholders as a whole for the long-term fulfillment of the investment mandate of Fondul Proprietatea, as well as the conduct by the Committee of Representatives of a procedure transparent and competitive selection process for appointing the new administrator.

Also, on September 27, the shareholders will have on the table the appointment for a period of three years of two members of the FP Representatives Committee, as a result of the expiration of the mandate of Nicholas Paris on April 6, 2024 and the resignation of Martin Bernstein , which became effective on July 12, 2024.

In addition to Istvan Sarkany, Nicholas Paris, proposed by the shareholder of LCL GRUP SRL, George-Vladimir Duhan, proposed by the Ministry of Finance, Marian-Cristian Mocanu who proposed himself, Ileana-Lăcrămioara Isărescu (daughter of the BNR governor, Mugur Isărescu, according to HotNews), proposed by the BT Maxim fund - managed by BT Asset Management and Andrew James Noble, proposed by shareholder Antoniu Codreanu.

Istvan Sarkany is an IT engineer, a graduate of Automation and Industrial Informatics at Transilvania University in Braşov. He graduated from two Master's programs, one in Software Engineering in Automation and another in Business Administration, both at Transilvania University in Braşov, according to the documents available on the FP website. He has over ten years of experience as an investor in capital market securities and is very active in investor forums in our country.