Mircea Ursache: The violation of the contract for the privatization of BCR sets a dangerous precedent

Reporter: Is the agreement which the SIFs signed with Erste valid from a legal point of view?

Mircea Ursache: In my opinion, the listing of BCR is a post-privatization condition; it has to abide by the same rules as any of the other post-privatization conditions.

Reporter: Some say it is not exactly a condition...

Mircea Ursache: As far as I know, that is not true. I am strongly behind my opinion that it should have been listed (ed. note: BCR) and that it is a post-privatization condition.

Reporter: What would be the consequences if it weren"t listed?

Mircea Ursache: Like any post-privatization condition, there is the option of going to court, and suing for damages.

Reporter: Who needs to file the lawsuit?

Mircea Ursache: The AVAS, obviously.

Reporter: Why would it do that? What could it possibly get?

Mircea Ursache: The contract is something that the parties have agreed upon. It can only be changed with the mutual agreement of the parties. They could have met and draw up an appendix... It"s true that they would have needed a memorandum with the government, but they could have done it. But they went with this informal agreement... This is definitely a mistake made by the AVAS!

Reporter: In its response to us, the AVAS said that it was decided in its Board of Directors that, since the SIFs signed the agreement in question, the AVAS bears no responsibility for it, and it can"t force the listing of BCR.

Mircea Ursache: So they do not want to do anything about it. This is a problem. In my opinion it is extremely serious, because it sets a precedent. For tens and hundreds of other post-privatization conditions of other contracts. And one day, someone might use this. This sets a terribly dangerous precedent. I"ve never heard of anything like that before.

It goes something like this: in the case of any privatization, aside from the intrinsic price which forces the seller to transfer the right of ownership to the buyer after it has been paid, there are also some post-privatization conditions, based on which the seller set the price: "That"s what you have to pay, but you also have to do this and that, for the price to be valid". That is why I am saying it is dangerous.

From my point of view, the fact that this contractual obligation hasn"t been honored, is the fault of the AVAS. They should have at least tried to negotiate an addendum that would cover it.

• The position of the AVAS

The officials of the AVAS have recently answered our question concerning the avenues of action which they have available to force the listing of BCR, and said that the Authority can not force the listing of the bank and bears no legal responsibility for the Agreement to postpone the listing which was signed by Erste and the five SIFs.

The officials of the AVAS said "(...) According to the documents remitted by the Buyer, at the end of the 36 months from the Date of Completion stipulated in the Contract, on August 21st, 2009, the Buyer has concluded an agreement with all the five SIFs (which together own 30.1175% of the 30.69% owned by the minority shareholders of BCR) which stipulates that EGB (ed. note: the successor of Erste) and the SIFs have agreed to postpone any operations related to the listing of BCR".

It also bears mentioning that, in order to comply with the provisions of art. 13.2 letter j, the AVAS posted on its website the contract by which the shares of BCR were sold.

The AVAS, through a Note of the Board of Directors has acknowledged that clause 13.2 (ed. note: concerning the listing of BCR) has become irrelevant, and has notified the Buyer that its obligation towards the AVAS that it had on the basis of that article of the Contract by which the shares of BCR were sold, is no longer valid".

The Agreement to postpone the listing of BCR provides that the signing parties will make all the necessary efforts to support each other in their relationship with the AVAS, in order to get its consent to amend the Contract, thus allowing the obligation to take BCR public to be negotiated exclusively between the SIFs and Erste.