Serious charges of stock market manipulation brought against the chairman of Banca Transilvania

• The representatives of Banca Transilvania: We are cooperating with the authorities

The management of Banca Transilvania (TLV) announced it would fully support the authorities in solving the case quickly and in a transparent manner, and that the charges brought against the members of the Board of Directors of the bank, which pertain exclusively to stock market transactions, do not interfere in any way with the day-to-day operation of the bank.

"Banca Transilvania acknowledged the decision of DIICOT Cluj to indict several persons, including Mr. Horia Ciorcilă, the chairman of the Board of Directors of Banca Transilvania, for alleged acts of stock market manipulation.

Concerning these accusations, we would like to specify that Banca Transilvania found out on December 16th, 2009 that Bank of Cyprus had acquired 9.7% of the share capital of Banca Transilvania. The Board of Directors of Banca Transilvania is not aware of any action with malicious intent of any of its members and has confidence in the professional and moral integrity of all its members", a press release sent by Banca Transilvania to the Bucharest Stock Exchange states.

• NBR: We will take no action for now

The four bankers which were indicted by the prosecutors of the DIICOT will benefit from the presumption of innocence, and the Romanian National Bank, (NBR) will not take any action against them before the court issues a final ruling, said Adrian Vasilescu, the advisor to the governor of the NBR.

"There will be a trial. The press release only mentions indictment, which means there will be a ruling later. Until that ruling is final, all the people mentioned in the communiqué by DIICOT are presumed innocent", said Vasilescu, when asked if the Central Bank, which authorizes the managers of banks, would take any action against the four.

• The CNVM: This is not a case of market manipulation

The CNVM considers that this particular case of transactions involving Banca Transilvania stock, for which several of its board members were indicted by the DIICOT, is more a case of share transfer based on inside information, and not a case of market manipulation.

"In April and May, the DIICOT has requested us to provide them information concerning the transactions made by several people with shares of Banca Transilvania, and we have cooperated with them since the beginning. We even had a verification on this matter at the Cluj branch of the brokerage firm IFB Finwest, and, based on results, in the beginning of June we came to the conclusion that this could be viewed as a case of trading based on privileged information. We told the prosecutors that there was a chance of information having been disclosed and used for making trades", said Lorand Kralik, CNVM commissioner.

• The scandal of SIF Banat - Crişana

Coincidentally, both Horia Ciorcilă and Claudiu Silaghi were involved last year in the row around the elections for the Board of Directors of SIF Banat-Crişana. The scandal culminated with the resignation of Horia Ciorcilă from the Board of Directors of SIF Banat-Crişana, on April 30, 2009. Prosecutors now claim that starting with May 15th, 2009, Silaghi began trading the shares of Banca Transilvania.

Besides the two top managers of Banca Transilvania, another major name of the Romanian financial market was involved in the fight for the Board of Directors of SIF Banat Crişana: Doru Lionăchescu, the main associate of Capital Partners.

One year before, Capital Partners has sold off 95% of a communication company to the offshore company Dodworth, which is the very company that the prosecutors claim was used to by Horia Ciorcilă to speculate on the stocks of Banca Transilvania.

After the resignation of Horia Ciorcilă from the board of directors of the FIC, Capital Partners requested that the CNVM investigate the General Meeting of Shareholders of SIF Banat Crişana.

Contacted by BURSA, Doru Lionăchescu, the main partner of investment firm Capital Partners, initially denied any connection between his firm and the offshore company Dodworth Limited, which the prosecutors of the DIICOT claim belongs to Horia Ciorcilă, even though, according to official records, Capital Partners did indeed sell 95% of "New Com Telecomunicaţii" to the offshore company Dodworth. Later, Doru Lionăchescu said: "Capital Partners never had any relation with the investment vehicle New Com Telecomunicaţii, it was owned by private investors, which were empowered to make that deal, we just brokered the deal". The head of the DIICOT of Cluj Napoca, Mircea Hrudei, said that the scandal of SIF Banat-Crişana, in which Claudiu Silaghi and Horia Ciorcilă were involved, they had no connection with the investigation launched by the DIICOT. He stressed that the DIICOT launched the investigation because of certain elements related to the capital market which drew their attention. According to their sources, the prosecutors have followed the trail of several Cypriot companies which had become extremely active on the Romanian capital market, including in the shareholder structure of the FICs.

• The allegations of the prosecutors

The defendant SILAGHI CLAUDIU - EUGEN-IULIU is charged with the following: between May 15th, 2009 and December 10th 2009, acting in concert with the other defendants, on the basis of the privileged information obtained by the defendant DASCĂL SERGIU DAN, he purchased, in several transactions on the Bucharest Stock Exchange, using the brokerage account of the defendant COJOCARU DOINA-MĂRIOARA, his mother-in-law, a total of 43,646,740 shares of TLV worth 74,797,448.34 lei, in order to control demand and supply for the shares of the bank, to create an unfair trading environment and to conceal the identity of the real holder, as well as to use the privileged information of which he was aware since the autumn of 2008 (due to his position as member of the Board of Directors of Banca Transilvania S.A.), concerning the intention of Bank of Cyprus Public Company Limited, Nicosia, Cyprus (HE 165) to acquire a large stake in Banca Transilvania S.A. (TLV).

On December 07, 2009, Mr. SILAGHI, sold all his shares using by way of the defendant COJOCARU DOINA-MĂRIOARA, he sold all the shares he held at the time (33,600,000 shares of TLV) at a price of 80,640,000.00 lei to the buyer Bank of Cyprus Public Company Limited, Nicosia, Cyprus (HE 165).

The defendant CIORCILĂ HORIA became aware of privileged information concerning the intention of Bank of Cyprus Public Company Limited, Nicosia, Cyprus (HE 165) to acquire a significant number of shares issued by Banca Transilvania S.A., traded on the BSE with the symbol TLV, and later, on December 07, 2009, using the privileged information, he sold, in two transactions, through the Cyprus-based offshore company Dodworth Limited (which he controlled), a number of 8,918,671 shares of TLV for the amount of 21,404,762.52 lei, to the buyer Bank of Cyprus Public Company Limited, Nicosia, Cyprus (HE 165).

The defendants CHRISTOFOUROU GEORGIOS and ISAAKIDIS ANASTASIOS are charged with the following: using their positions of managing director, and employee of Bank of Cyprus Public Company Limited, Nicosia, Cyprus (HE 165) - the Romanian branch, have obtained privileged information concerning the fact that Banca Transilvania was looking to find a strategic investor, as well as the fact that the bank that employed them was looking to buy a significant number of shares in Banca Transilvania (TLV), they have disclosed this information to the defendants SILAGHI CLAUDIU-EUGEN-IULIU and CIORCILĂ HORIA, an in agreement with them, using the two privileged pieces of information, they have acted in concert, concluding several trades TLV by which they have acquired 3,541,500 shares for a total price of 7,897,545.00 lei.

Later, the shares purchased on their own behalf were sold by the two defendants to the bank they were working for, for an illicit gain of 196,505 lei.

The charges brought against the defendants SILAGHI MIRELA, COJOCARU DOINA-MĂRIOARA, DASCĂL SERGIU DAN and JURCOVAN RADU CODRUŢ have led to the implementation of the plan to commit an offense, by the four defendants.

The investigations made by the prosecutor D.I.I.C.O.T. in this case were not concerned with nor did they uncover any infringements of the banking legislation in the activity of the two legal entities - Banca Transilvania and Bank of Cyprus Public Company Limited, Nicosia, Cyprus - the Romanian branch, and it has showed beyond any doubt that the deeds of the defendants were made on their own behalf, without involving the banks that they work for.

The case has been submitted to be tried in a competent judges of the Court of Bucharest.