The ASF needs to be cleansed

The inability of the Financial Oversight Authority (ASF) to fulfill its role is now visible, without the need for specialized subtleties, because the chaos induced in the SIF market has reached the stage where it requires the intervention from the police, and trading has been suspended in two of the SIFs (Oltenia and Transilvania).

• The confusion at SIF Oltenia is created by the ASF

At SIF Oltenia, the chaos has been initiated by the cryptic response of the ASF, which, against all evidence, has refused to declare that eleven investment funds financed by SIF Banat Crişana şi SIF Muntenia are acting in concert, with the two SIFs forcing through decisions in the General Shareholders Meeting by mobilizing the votes of the eleven funds.

The ASF has shocked the public by saying that it has found no legal elements that would indicate that the aforementioned were acting in concert, but that kind of answer, without any argument, is typical for an arbitrary character (See the letter of the Association of Brokers addressed to the ASF) The Association of Brokers urges the ASF to restore trust in the Romanian capital market.

In reality, the case of the eleven investment funds is nothing but a repeat of the 2012-2013 situation, where Najib el Lakis was arrested and received a three year suspended sentence, for, among other things, market manipulation.

The ruling was rendered last year, but while serving his sentence, Lakis is officially acting as the consultant of Bogdan Drăgoi, the president of SIF Banat Crişana.

The ASF did not deign to explain how it can allow Lakis to hold positions at SIF Banat Crişana while serving his sentence.

The question has been lingering for more than a year.

The ASF insists on not providing an explanation.

The ASF does not explain why in the case of Najib el Lakis it concluded that there was acting in concert, but in the case of Bogdan Drăgoi it didn't, even though the situation is the same, the concept is the same, in fact even some of the investment funds involved are the same.

The ASF has created the circumstance where Tudor Ciurezu, the head of SIF Oltenia, is being discriminated against, in favor of the Lakis-Drăgoi couple of the management of SIF Banat Crişana, going as far as to tolerate the hijacking of the General Shareholder Meeting of April 28th, by the group of the 11 investment funds, which, together with SIF1 and SIF4, have organized a different shareholder meeting than the official one, on the sidewalk, outside the headquarters of SIF5.

Instead of disavowing this circus, which, under the direction of Drăgoi, has been led by a person which is listed as in attendance in the Shareholder meeting held inside the headquarters, the ASF has begun doubting the legality of the Shareholder held inside the building.

Claiming the uncertainty of the indoors General Shareholder Meeting, the ASF has suspended trading in SIF Oltenia, but the uncertain situation is being created precisely by the ASF itself.

Today, when the confusion has not been removed yet, the ASF has allowed trading in SIF Oltenia shares to resume.

Instead of fulfilling its purpose - to pass measures which would preserve an orderly market for SIF Oltenia -, the ASF has introduced arbitrariness in the decision-making process and has invalidated the market.

The Financial Oversight Authority has become a risk for the orderly market.

• At SIF Transilvania, the ASF is taking the place of the General Shareholder Meeting

The ASF is deliberately pursuing the dismantling of the executive structure of SIF Transilvania, trying to remove Mihai Fercală and forcefully appointing its favorites - the so-called "Frăţilă faction" -, going against its own regulations, against the law and against existing court rulings.

In an unprecedented manner, the ASF accepts that the same Marius Moldovan appears as a member on the Supervisory Board, as well as on the Directorate of SIF Transilvania, turning the dual management of the company and the law into a joke.

In its eagerness to bring down Mihai Fercală, last Friday, the ASF has asked the Supervisory Council to take measures to check the information in the documents concerning the decisions of the General Shareholder Meeting of April 28 - an action which legally is not under the jurisdiction of Supervisory Council, but rather of the Directorate and/or the courts.

The actions of the ASF by which it seems to want to defy the law have become so many that they have generated a flood of complaints filed by Mihai Fercală to every possible court, from the county courts to the ASF itself (the most recent being a criminal complaint filed with the DIICOT of Bucharest against Supervisory Board members Crinel Valer Andănuţ, Moldovan Marius and against ASF vice-president Gabriel Grădinescu), as well as to the Chambers of the Parliament and to the Presidency, alleging abuse, fraud, forgery and use of forgery.

All of the above came to a climax on Friday, when the "Frăţilă faction" tried to prevent Mihai Fercală and Ştefan Szabo from entering the premises of SIF Transilvania, by mobilizing a security company, a different one than the one that SIF Transilvania had a contract with.

The ASF is behind all of this ghetto-style scandal.

In the reader comments section, somebody with the username FRĂŢILĂ, posted the following message, which I tend to believe was posted by Constantin Frăţilă himself:

"3. Pathetic manipulation

(message sent by FRĂŢILĂ on 08.05.2020, 08:30)

Technically speaking, when it comes to representation, the situation is as follows:

In the case of the Court of Appeal, the date for the appeal hearing was April 1st, 04 when Mr. IULIAN STAN still had a mandate, THE JUDGE ruled that that was enough for the SIF to be represented.

In the case of the Braşov County Court, the date of the action was 22.04. 2020, a date when none of the members of the directorate were authorized anymore, and the Romanian Trade Registry very clearly states that on April 19th, 2020 the term of the former Directorate ended, the JUDGE found that the two, Fercală and Szitas are not and there is no way for them to ever be the representatives of SIF TRANSILVANIA anymore.

I will be posting further comments for clarification, if those that ask for them do so in a civilized and on-topic manner.

And I will make another clarification, the two gentlemen no longer had the RIGHT TO SERVE AS PART OF THE DIRECTORATE, and because they have continued to act like they still did, starting today THEY ARE NO LONGER ALLOWED TO ENTER THE COMPANY'S PREMISES. I want to make myself clear, Mr. Fercală and Mr. Szitas, as regular citizens and individuals, are no longer allowed to enter the company's properties and to disturb its operation".

Mihai Fercală had to call in the police to enter the premises of SIF Transilvania.

This kind of ghetto-like skirmishes apparently justify suspending the trading in SIF Transilvania shares, even though the situation over there could have been handled in compliance with the law, without so much turmoil and scandal.

And without suspending trading.

On May 11th, SIF Transilvania announced the results of the General Shareholder Meeting of May 11, under the signature "the President of the Directorate of the "Transilvania" S.A Financial Investment Society. Economics Ph. D. Mihai FERCALĂ", but after about five hours, the BSE posted another current year report, signed by Andănuţ and Moldovan, which state that the report by Fercală is false and that Fercală and Szabo prevented them from entering the headquarters.

It is an extension and a duplication of the case of SIF Oltenia, where, similarly, contradictory reports were posted, about what should have been just one Ordinary General Shareholder Meeting.

It seems to be a method patented by the ASF.

The ASF is taking the place of the General Shareholder Meeting, of the Trade Registry, of the Police and the Courts.

The only thing that the ASF isn't doing is precisely what it should be, because it is not trying to maintain an orderly market for SIF Transilvania shares.

• The ASF is pulling the Bucharest Stock Exchange and its president into the vortex

The Bucharest Stock Exchange has had its private company status altered by the ASF, which is now dictating to it which reports it is allowed to publish and which ones it isn't.

The ASF has transferred to the management of the BSE the powers of a judge.

The reports of the two SIFs, which the BSE refused to publish on its website, have turned to posting them on their own websites and in the BURSA newspaper (who did so promptly).

Bu the dark influence of the ASF on the market has manifested itself in other ways as well.

On the asphalt in front of the headquarters of SIF Oltenia, the so-called parallel shareholder meeting gathering those who have refused to participate in the official Ordinary General Shareholder Meeting (in reality, its shareholders are the investment funds suspected of acting in concert), have voted to hold all the members of the management of SIF Oltenia liable, with the exception of Cristian Buşu, who was the chairman of their shareholder meeting.

Due to their knee-jerk reaction, Lakis' supporters did not realize that they were also incriminating Radu Hanga, the president of the Bucharest Stock Exchange!

The accusation being made could not be serious, since the participants in that street meeting excluded Cristian Buşu from being held liable, in a transaction where Cristian Buşu agreed and signed that he agreed, along with all the other executives.

So, out of over eagerness to bring Tudor Ciurezu to his knees, a collateral victim has been inadvertently created, the very president of the BSE.

By taking the street protests of Bogdan Drăgoi seriously, the ASF lends weight to the accusation brought to the chairman of the BSE.

Where will the ASF stop its aggression against the stock market?!

• The inability of the ASF to communicate is the result of their incompetence

Throughout this period of mutilation of the image of the stock market, the BURSA journalists have repeatedly offered the ASF and its vice-president Gabriel Grădinescu the opportunity to talk to the investing public and present the opinion of the ASF on the controversies that are eroding the stock market community, but ran into an arrogant, hostile silent treatment.

My 30 year experience as a journalist tells me that an authority is the more silent, the more incompetent it is and the harder it finds it to justify its decisions, and that it is the more arrogant and hostile the more its team is made up based on subjective criteria, with hiring based on influence peddling and political interventions.

Numerous members of the stock market community confirm that that is the case of the ASF .

In my opinion the ASF needs to undergo a revision.

- The revision can be a reform, in other words for the interim leadership to go away and for a responsible and upright person, that honors the law and the stock market, to come in.

- Or that revision can be a revolution, where the ASF in its current version would be dissolved and it would return to being a specialized regulator and dedicated exclusively to the stock market which would have as their purpose, inscribed in the law, the development of the stock market.

In both cases, the staff of the ASF needs to be cleansed.