Some of the funds of "Franklin Templeton", interested in investing the Proprietatea Fund

• Mark Mobius accuses the Romanian state that it does not respect foreign investors

Some of the funds managed by "Fraklin Templeton" (FT) would be interested in investing in the shares of the Proprietatea Fund, but are looking for a way of doing so without violating the legal provisions, given the fact that "Franklin Templeton" is also the manager of the "Fondului Proprietatea", Mark Mobius, the CEO of Franklin Templeton said yesterday.

"Funds from our portfolio would be interested in investing in the shares of the Fund, but we have to be very careful in how we do that, to avoid violating the law. We are for now studying the provisions that we need to comply with. If you were an investor in the Proprietatea Fund, wouldn"t you want us to invest in the shares of the Fund?", Mobius asked rhetorically, on the occasion of a press conference held shortly before the meeting between the members of "Franklin Templeton" and the shareholders of the Fund.

Mark Mobius used yesterday"s opportunity to criticize the Romanian state, which it accused that it does not respect foreign investors.

"There is no way Romania can grow without investments, and I don"t necessarily refer to foreign investments alone, but also those made by domestic investors. Investors need to be treated with respect and in a fair manner", the head of Franklin Templeton said.

When asked what he meant when he accused the state of being disrespectful to investors, Mobius said he was reffering to the 400 million lei donation which Romgaz was forced to make to the state budget: "What happened at Romgaz was in fact an expropriation", said Mobius.

The representatives of "Franklin Templeton" once again expressed their disagreement with the plans of the Romanian government to set up the two giant energy companies - "Electra" and "Hidroenergetica" by merging several energy companies, in which the Proprietatea Fund is a minority shareholder.

"The continuation of the merger process is a bad idea. Hidroelectrica and Nuclearelectrica should be listed on the stock exchange, there are examples of similar companies which are listed", Grzegorz Konieczny, the manager of the Proprietatea Fund said yesterday. The management of the Fund has so far opposed the creation of the two energy companies, bringing several lawsuits against them.

No capital gains tax for "first hand shareholders" of the Proprietatea Fund

The "first hand" shareholders of the Proprietatea Fund will not pay taxes on gains made from the sale of the shares on the Bucharest Stock Exchange, Dana-Mirela Ionescu, the CEO of "Raiffeisen Capital& Investment", one of the members of the consortium that is handling the listing of the Fund.

In turn, investors that bought stock from the initial recipients of the shares who decide to sell them on the BSE will have to pay taxes.

"Someone who bought shares at 0.4 lei and sells them for 1 leu, will pay a capital gains tax for 0.6 lei. If they can"t provide proof of the price they bought the stock for, they will pay taxes as if they had bought them at a price of 1 leu per share", said Dana Mirela Ionescu.

Konieczny: "We expect the stake of the state to fall below 33% this year"

Grzegorz Konieczny, the manager of the Proprietatea Fund, said that the stake of the Romanian government in the Proprietatea Fund could fall below the level of 33%, which grants it control of the Fund. The Articles of Incorporation of the Proprietatea Fund provide a censitary vote system, as long as the state holds more than 33% of the shares of the Fund.

After its stake falls below 33%, the voting system will undergo essential changes, meaning one share will account for one vote in the General Shareholder Meeting.

"Considering the speed of the National Authority for the Restitution of Properties has issued deeds for the compensation of the Fund, we expect the stake of the state will fall below 33% this year", said Konieczny, who added that, if the state were to want to increase its stake in the Fund, it would need a share capital increase on which all the shareholders of the Proprietatea Fund would be called to present their opinion.

"If the state were to want to increase its stake, a share capital increase will be necessary, one on which all the shareholders of the Fund will need to make a decision. This will need to be a transparent operation", said Konieczny.

The Proprietatea Fund is set to get listed on the Bucharest Stock Exchange on January 25th.