The Association of Investors requests the enforcement of the law concerning Initial Public Offers

The Association of Investors on the Capital Market (AIPC) claims that the regulator of the capital market, the National Securities Commission, has no clear stance on the execution of the legal dispositions of article 203 and subsequent of the Law no. 297/2004 concerning the Capital Market, dealing with takeover bids.

The AIPC considers that such issues must quickly be solved, given the turmoil that the Romanian capital market is experiencing at the moment, which is caused both by the global economic crisis, as well as by the mistakes made by the legislative and executive powers of Romania.

The AIPC said: "The goal of a takeover bid in case a shareholder reaches a controlling interest in a company is to protect the interests of minority shareholders who must receive a fair price for their stakes".

The Association of Investors on the Capital Market considers that the provisions of the law on the obligation to perform a takeover bid once a shareholder has a 33% stake in the company have to comply with the letter and the spirit of the Directive of the European Parliament and of the European Council no. 25/2004. Thus, in the calculation of stakes held, in order to determine if a shareholder has reached the threshold mentioned by paragraph 203 of the Law of the Stock Market, both shares held directly titles as well as those held indirectly, as well as stock held by persons acting in coordination must be considered. Also, the aforementioned dispositions of the law must be applied regardless of the name of the shareholder that reached that stake threshold.

The Association provides several examples of issuers which had irregularities in the launch of the takeover bid.

"I have been surprised that Rompetrol Rafinare, Rompetrol Well Services, SCT Bucuresti, Dunapref Giurgiu, Ardaf, issuers whose majority shareholders meet the provisions of the aforementioned law, made no takeover bids, even though they were required to do so", the Association said, which further said: "In the same vein, AIPC awaits the enforcement of the law on mandatory takeover bids in the case of issuers Remarul 16 Februarie, Zimtub, Comat, Retezat, which investors have already notified the National Securities Commission about.

The Association demands that the National Securities Commission apply the legal norms in effect in the case of majority shareholders which refuse to comply with the laws in effect, and not just by issuing warnings and levying petty fines (see the case of "Corint" Târgovişte). According to the provisions of article 272 letter a), article 273 paragraph (1) letter b) and paragraph276 letter a) pf the Law 297/2004 with its subsequent amendments and modifications, the fine ranges between 0,5% and 5% of the share capital of the issuer in question.