Stock market, please help thyself!

I am in a very complicated situation: on one hand I applaud, admire and encourage the initiative of Radu Moraru to finance his TV station through a public subscription; on the other hand, I am convinced that this is an IPO in every possible way and that it needs to comply with the rules of the stock market and I am not impressed at all by the fact that the CNVM is shirking its obligations, by claiming, in the very statements it issued to BURSA, that Radu Moraru doesn't have to get the approval of the CNVM for his project.

The situation is all the more thorny, because Radu Moraru (whom I really can't fault for not knowing such legal details) mentioned that statement made by the CNVM, which we quoted, in a chat he had with HotNews.ro readers on Monday, maintaining that it was an official point of view that a public subscription offer in Naşul TV didn't have to comply with the regulations of the CNVM.

The opinion of the CNVM is undoubtedly wrong.

We hereinafter include the paragraphs of the Law no. 31/1990 and of the law 297/2004, concerning the public subscription / public offering, which, upon reading, anyone can see that having the approval of the CNVM in that situation is mandatory.

The fact that the Law no. 31/1990 does not mention the obligations mentioned in the law no. 297/2004, does not mean that one can choose which ones of those two laws to comply with. In the case of a public offering, the provisions of the two laws apply simultaneously.

It is certain.

It is definite.

It is beyond any doubts.

I think that Radu Moraru needs to be supported and be described as a good example of business acumen - initiatives like this are the hope for the consolidation of the economy and the development of the capital market - way to go, Radu!

On the other hand, the initiative needs to comply with the law, it's elementary.

Those in charge of the stock market should help him!

They would be doing themselves a favor...

• The law no. 31/1990

CHAPTER II - Specific formalities for the creation of a company through public subscription

Art. 18

(1) When the company is created through public subscription, the founders will have to draft a prospectus, which must include all of the information stipulated in article 8, with the exception of that which concern the administrators and the directors, or the members of the directorate or of the supervisory board, as well as the auditors, or, as the case may be, the financial auditor, and it will also mention the end date for the subscription.

(2) Before being published, a certified copy of the prospectus of the offering signed by the founders will need to be submitted to the office of the Trade Registry in the county where the company will have its headquarters.

(3) If it is found that the requirements of paragraph (1) and (2) are met, the delegated judge of the Trade Registry will authorize the publication of the prospectus.

(4) Any prospectus which does not include all of the above mentions is null and void. Subscribers will not be allowed to claim the nullity of the prospectus, if they have participated in the incorporation of the company or if they have exercised their shareholder rights and obligations.

• • The Law no. 297/2004 concerning the stock market

(published in the Official Gazette no. 571/29.06.2004)

TITLE I - GENERAL DISPOSITIONS

Art.1.- (1) The present law regulates the creation and functioning of the financial instruments markets, with their specific institutions and operations, as well as of the collective investment bodies, with the goal of mobilizing existing financial resources by investing in financial instruments.

18. public offering of securities - means the communication addressed to some people, made in any form and by any means, which presents enough information on the terms of the offering and about the securities on offer, so as to allow investors to make a decision on selling, buying or subscribing the securities in question. This definition will also apply in the case of investing in securities through financial brokerage firms;

TITLE V - MARKET OPERATIONS

Chapter I - Public offerings

Section 1 -Common dispositions

Art.173.- (1) Any person which intends to conduct a public offering will need to submit a request for the approval of the prospectus to the Romanian National Securities Commission, in the case of the public selling offer, or of the offer document, in the case of a tender offer, accompanied by an announcement, in compliance with the regulations issued by the Romanian National Securities Commission.

(2) After the approval of the prospectus/offering document, it must be made available to the public, by the day the public offering will get initiated, at the latest.

Art.174.- (1) A public offering conducted without the approval of the prospectus/offering document with the failure to comply with the terms established through the decision for its approval is null and void by law and will lead to the punishment of the guilty according to the law.

(2) The bidder will be required to pay the money back to investors acting in good-faith as well as pay them damages resulting from the nullity of the transactions concluded based on such an offering.