No winner in the match between Agalopol and Sobolewski

The Central Depository will join the TARGET2-Securities (T2S) in the first wave, just like its management wanted it to happen, but without the new software, sources from the stock market told us.

The General Shareholder Meeting of the Central Depository, held at the end of last week, announced a clash between Cristian Agalopol, the chairman of the Central Depository, and Ludwik Sobolewski, the CEO of the BSE, as the agenda of the meeting included sensitive topics, which the two of them had disagreements on.

The Depository was supposed to present to the shareholders a report concerning the status of the accession of the TARGET2 Securities project (ed. note: T2-S -the unified pan-European service for cross border settlement) - "the third item" on the agenda, and the shareholders were being called to vote on the acquisition of a new IT system and to select the provider of that system - "item six".

A long time ago, the officials of the Central Depository (DC) signed with the European Central Bank (BCE) the framework agreement for the T2-S project, expressing their wish to join in the first migration wave.

Our sources present during Friday's general shareholder meeting, told us that a representative of the ECB was adamant that if the Central Depository didn't join the T2S in the first wave as stipulated, would have to pay penalties that would amount to at least 2.5 million Euros.

The adhesion memorandum stipulated that the Central Depository must have all the corporate and regulatory approvals.

Our sources state that on Friday, some shareholders have asked the representative of the ECB, whether he had checked in advance all the approvals from the memorandum, and he said that "it wasn't his job to do that".

During the meeting, Ludwik Sobolewski proposed for "item three" not to be included on the agenda, because the BSE, which holds 60% of the Central Depository, had asked for a different version of it.

Our sources told us: "The BSE has asked for the presentation of the project, not for the holding of a vote on it, as it did not consider it an issue to be discussed in the General Shareholder Meeting".

As a result, Ludwik Sobolewski did not want to give his vote on the Depository joining the T2S, and he insisted that the shareholders could not make a decision without him, and he used the bylaws to back up his claim.

After the talks, the shareholders voted according to Law 31, based on the number of votes cast, rather than according to the stipulations of the bylaws. There are some voices, however, who claim that the vote was not fair, because it should have been cast according to the bylaws - 50% of the votes of the shareholders present or represented by proxies, as the CEO of the BSE was still present in the General Shareholder Meeting.

When the time came to vote on item six on the agenda, Ludwik Sobolewski came up with a resolution, which stipulated postponing the selection of the software provider by one month.

After heated debates, the shareholders have put up the item for a vote, which is when the CEO of the BSE abstained, and even left the room, and he mandated Alin Barbu, the deputy CEO of the BSE to abstain from voting on any of the items on the agenda.

As a result, the budget of the Central Depository for this year was not voted either.

There is talk in the market that Ludwik Sobolewski got involved in the selection of the IT provider for the depository, by adding an additional name from the Nasdaq OMX group to the list, after the selection process had been completed.

The conclusion of the General Shareholder Meeting is that the Central Depository will join the T2-S project in the first wave, but without switching the software platform, and it will be able to do so due to the small number of cross-border trades it performs (3-4/day).

The Depository has two years to select the software.

Upon the first convening, on Thursday, Ludwik Sobolewski, the CEO of the Bucharest Stock Exchange, did not attend the General Shareholder Meeting of the Central Depository, which he had summoned himself, at the request of the Bucharest Stock Exchange and for which he apparently had a "blank" mandate, from the Board of Directors, to vote as he saw fit.

The project of a new IT system at the Depository is one worth several million Euros, and the postponement of the migration to T2-S could have also cost several million, meaning that making a decision on the matter was not easy.

There are voices who think that it is not the CEO of the BSE, but the shareholders of the latter that should have made a decision on those matters. The ones who share that view argue that since its ability to make decisions is limited to projects that are worth up to 500,000 Euros, the Board of Directors could not have normally empowered the CEO to vote on a project worth several million Euros, even if the project belonged to the Central Depository.