Majority stakeholder of "Corint" Târgovişte, forced to make a mandatory takeover offer

Minority shareholder of "Corint" Târgovişte (listed with the symbol CONY on Rasdaq), Mr. Rădescu Emilian, yesterday won the trial that demanded that the majority shareholder make a public takeover offer, as it now holds more than 33% in the company.

Law firm "Duţescu şi Asociaţii" represented Mr. Rădescu during the appeal with the Court of Appeal in Ploie ti and won the case by a ruling of the court that the majority shareholder of "Corint" must make a public takeover offer.

Lawyers Cristian Duţescu said: "The judge confirmed that the rules of a regulated market apply to the Rasdaq market as well".

As far back as May 2007, Mr. Rădescu requested that the majority shareholder, who holds 61,14% of the company"s share capital, make a public takeover offer (OPP), according to the law.

Given the provisions of art. 203 of the law no. 297/2007 concerning the capital market and the fact that the majority stake held by the majority shareholder exceeds 33%, the latter is required to make a mandatory public takeover offer within two months at the latest.

Important interventions in this trial came from the National Securities Commission and from the Association of Investors on the Capital Market.

Initially, the stock market regulator did not get involved in this trial, but it then made a request to intervene on behalf of the plaintiff, maintaining that the courts must understand the regulations of the National Securities Commission (CNVM) and apply them in a consistent manner for all the companies whose shares are traded on the Romanian stock market.

AIPC stated its willingness to back Corint"s minority shareholder in its action, because shareholder rights are protected by the European legislation and consequently, by the Romanian one.

There are several cases of non-compliance with the law on the stock market when it comes to public takeover offers, especially on the Rasdaq market, and the case of "Corint" Târgovişte was presented for the first time in our newspaper.

On March 26th 2008, the National Securities Commission notified the majority shareholder of "Corint" that it must comply with the provisions of the law and make a mandatory takeover offer.

The majority shareholder did not proceed with a mandatory takeover offer, even after having received the notification, and thus, Mr. Rădescu Emilian addressed the Court of Dâmboviţa, in order to get a ruling that would force the majority shareholder to make the mandatory takeover offer.

However, the Court of Dâmboviţa denied Rădescu Emilian"s request on October 20th, 2008, stating that, based on the CNVM decision no. 1507/23.07.2008, shares traded on the Rasdaq market belong to the alternative trading system and, according to the features of this system, exceeding a 33% stake threshold does not require the shareholder in question to make a mandatory takeover offer. The minority shareholder subsequently made an appeal against the ruling of the Dâmboviţa Court, claiming that, according to CP/80060 of the CNVM, the Commission maintains that the alternative trading system approved through the Decision no. 1507/23.07.2008 can not be considered an "unregulated market".

At the end of last year, specifically on December 11th, 2008, CNVM levied a 5000 lei fine on Mr. Axinte Gheorghe, Corint"s majority shareholder, but the former still refused to make a public takeover offer.

Now he will be forced to do it.