"Pioneer Asset Management", forced to summon its shareholders to decide on the future of the company

The Romanian National Securities Commission (CNVM) is forcing the Board of Directors of the Investment Management Company "Pioneer Asset Management" to summon the shareholders to decide on whether the company will be dissolved, or, as the case may be, its share capital will be reduced or increased, since the company"s net assets decreased to less than 50% of the subscribed share capital, an Ordinance of the Romanian National Securities Commission states. "Pioneer Asset Management" SAI has a share capital of 7.55 million lei, according to information from the company"s website.

Contacted by BURSA, Florin Dolea, the executive director of "Pioneer Asset Management", said that the company posted losses of about 4 million lei in the last three-four years, in particular, due to the expenses incurred in developing the network for the distribution of its investment funds. Mr. Dolea is optimistic that the shareholders will not decide to dissolve the company, since they also have the legal recourse of increasing the company"s share capital; or reducing it by an amount at least equal to the losses that could not be covered using the company"s reserves. Florin Dolea said: "Over the last 3-4 years we accumulated losses of about 4 million lei and the company"s net assets fell to less than half of the subscribed share capital. Essentially, the losses resulted from the investments we made in developing the distribution network, expenses which are par for the course. I think that the CNVM was a bit too eager in issuing this Ordinance, it should have waited until we had approved the financial statements for 2010. Thanks to the positive evolution of the company"s activities, I am convinced that the General Extraordinary Shareholder Meeting will not decide to dissolve the company, quite the contrary, it will vote in favor of restoring the ratio between the net assets and the subscribed share capital. This is a mere formality and it will be done in the near future".

Among others, "Pioneer Asset Management" manages the Stabilo and Integro investment funds.

Article 153^24, paragraph 1 of the Law no. 31/1990 concerning companies states: "If the directorate or the board of directors find that due to losses, determined through the yearly financial statements approved according to the provisions of the law, the company"s net assets, determined as the difference between the total assets and the total liabilities of the company, amount to less than half the company"s subscribed share capital, it will immediately summon the General Extraordinary Shareholder Meeting to decide whether the company should be dissolved".

Paragraph 4 states "If the General Extraordinary Shareholder Meeting does not wish to dissolve the company, then by the end of the financial year following the one in which the losses were recorded, and subject to the provisions of Article 10, the company must reduce the share capital by an amount at least equal to the losses that could not be covered using the company"s reserves, unless during that time the net assets of the company had increased again to at least half of the company"s share capital".