RUMORS THAT THE REPLACEMENT OF GREG KONIECZNY IS BEING PREPARED Franklin Templeton is looking for a co-manager for the Proprietatea Fund

Franklin Templeton (FT) is looking for a co-manager of the investment team of the Proprietatea Fund, said its representatives in response to our request for comment on the information that was making the rounds in the market that the replacement of Greg Konieczny as manager of the Proprietatea Fund is being prepared.

"We want to inform you that we have not announced specific changes or nominations in the team that manages the portfolio of the Proprietatea Fund", Franklin Templeton officials told us. "We can confirm that we are currently running a plan to supplement our resources, including appointing a co-manager of the investment team, that would provide support to Greg Konieczny. Greg still holds the position of Portfolio Manager of the Proprietatea Fund".

Market sources had previously claimed that Franklin Templeton was planning to replace Greg Konieczny in a few months.

In the General Shareholder Meeting of the Proprietatea Fund in April, Greg Konieczny said that the Proprietatea Fund had not met its investment objectives requested by the shareholders: "We were supposed to increase the net asset value per share, but in the last 12 months we have a 7% drop. We are hoping that by June, we will be seeing positive numbers. We were also supposed to reduce the discount (ed. note: between the price and the net asset value). The 31% discount isn't satisfactory for us, for the board and for the shareholders".

The Proprietatea Fund has ended the first quarter of 2016 with an unaudited loss of 585.6 million lei, compared to the net loss of 668.7 million lei pertaining to the quarter that ended on March 31st, 2015, according to information sent to the Bucharest Stock Exchange.

Greg Konieczny, the manager of the Proprietatea Fund recently told us: "Sure, we have repeatedly said in the past as well that the financial statements and the profit and loss account of the Proprietatea Fund do not very accurately reflect the performance of the Fund, because in this period they have been influenced by the short term market fluctuations, especially those of OMV Petrom.

Overall, the Fund's NAVl and the stock price have been dropping over the first four months; we are not pleased with this development, but we do believe there is potential for the market to turn around, especially given the recovery in the price of crude. We are also focusing on continuing to reduce the NAV: we are going to do a cash distribution, we will continue the stock buybacks and we are prepared to use all the available tools to generate returns for our shareholders".

The weight of foreign institutional investors in the share capital of the Proprietatea Fund has increased from 53% in March 2015, to 60% at the end of March 2016, the Proprietatea Fund has announced, one year after the secondary listing on the London Stock Exchange.