NEW SCANDAL IN FAGARAS "Nitramonia" Owners Threaten To Sue The State for 10 Million USD

• Privatization Authority forecloses on "Nitramonia" for 56 billion ROL overdue debt

• Investors in "Nitramonia" claim authorities show no support to this company

• "Nitramonia" shutdown could cause environment catastrophe

The American investor in explosives manufacturer "Nitramonia" Fagaras is threatening The Privatization Authority (A.P.A.P.S.) to pull out of the company and sue The State for 10 million USD in damages. Valerian Simirica, president of "S&T Oil Equipment and Machinery," which holds 79.05% in "Nitramonia," explains the 10 million USD claim by the expenses made so far, the losses caused by the termination of the privatization contract and the damages caused to the image of the companies he represents. "Nitramonia" management yesterday told a press conference that, in the period between March 21st, 2003, when A.P.A.P.S. signed the privatization contract with "Fletcher Group," and the date when "S&T Oil Equipment and Machinery" took over the company - a period when "Nitramonia" was managed by A.P.A.P.S. - "Nitramonia" accumulated an additional 269 billion ROL debt. "Nitramonia" management say this debt can neither be pardoned or deferred and so the company receives foreclosure notices on a daily basis and is running the risk of defaulting.

Moreover, A.P.A.P.S. has initiated foreclosure procedures on two counts: the dividends due for the fiscal year 1995 and an overdue loan plus penalties. Update according to the inflation rate, the aggregated sum is 56 billion ROL. A.P.A.P.S. yesterday demanded that "Nitramonia" management make the payment within 24 hours.

"Nitramonia" holds receivables worth 300 billion ROL, but the management believes this sum is beyond recovery. The company has presented The National Anti-Corruption Prosecutor's Office (P.N.A.) the detailed situation of contracts signed between 1997 and 2003, that is, the period when the company was under special administration. "Nitramonia" general manager Francisc Toba, points out that most of the contracts that involved "Nitramonia" product deliveries were signed with inconsequential companies, most of which no longer exist. P.N.A. investigations have produced nothing so far.

"Nitramonia" management representatives yesterday stressed that the investors was in fact being prevented from applying its program aimed at restructuring the company and resuming production: "A well concerted attack has been mounted against Nitramonia because we make explosives, while highways are being built in Romania." Mihai Tanjala, the former general manager of the company, accuses Aristotel Cancescu, chairman of The Brasov County Council, of having ordered the publications he controls to attack "Nitramonia" because he stopped receiving the sponsorships he had received year after year. Negative press articles were soon followed by audits and inspections by State authorities: The Environment Authority - Brasov, The Romanian Intelligence Service, The Privatization Authority Audit Corps. However, no irregularity was found. Tanjala further said attacks against "Nitramonia" had also been initiated from abroad. He exemplified with "Nitromak," a Turkish company and an important client of "Nitramonia," which threatened to stop doing business with "Nitramonia" unless it was allowed to take it over for a ridiculously low price.