The Bucharest Stock Exchange is getting listed. But what about its plot of land?

The prospectus for the IPO of the Bucharest Stock Exchange (BSE) mentions the plot of land with a surface of 575 sqm, located at 44-46, Mareşal Averescu Boulevard, which has been recorded as a "tangible asset", but it does not specify whether it is indeed an "asset" (not just concerning its "tangibility" but its tangibility as well), because for almost a decade, the Stock Exchange has been unable to use it in any way - it can not build on it, nor can it sell it.

When it was still being hosted by the National Bank of Romania, the BSE acquired the land in question with the praiseworthy intention of building its own headquarters which would have made it truly stand by itself and would have allowed it to not abuse the generosity of the NBR (which supported the BSE every way it could).

However, the real estate is unkind to some; after the purchase, the right of ownership of the former owner of the plot of land was challenged in court.

Wouldn"t this mean that the plot of land should be listed under "assets with uncertain ownership"?

The prospectus mentions that the plot of land was intended to be used for the construction of a new headquarters for the stock exchange, but keeps mum on its unclear legal status.

Răzvan Paşol, the CEO of "Intercapital Invest", the brokerage firm selected to intermediate the public offering of the Stock Exchange, which authored the prospectus, stated for BURSA, that the litigation around the plot of land in question was not mentioned in the prospectus because the Stock Exchange did not provide any information on this matter.

"We drew up the prospectus using the information we got from the issuer. We couldn"t have included in the prospectus any more or any less than what they gave us. You have to ask them", Răzvan Paşol said.

But the members of the board of administration of the BSE whom we contacted did not provide us with any details concerning the stage of the lawsuit for the plot of land located on the Averescu boulevard. Some of them claimed this was "a very old issue" and that they didn"t have any recent information on the matter.

Anca Dumitru, the CEO of the Bucharest Stock Exchange, said that the lawsuit was not required to be mentioned in the Prospectus, since it does not affect the financial statements or the profitability of the BSE.

Let"s admit that the real estate market has crashed and the plot of land is not worth the USD 500,000 that the Exchange paid for it 10 years ago, but instead it is only worth half of that amount (the Prospectus says that at the end of the 2009, the plot of land was valued at 1 million lei).

Let"s admit that compared to the activity of the Bucharest Stock Exchange, when looking at it as a corporation, the inability to use the plot of land does not affect its profitability in any way.

But we believe that the self-listing of the BSE should set the standard in terms of clarity, without any shadow.

Why all this fumbling and hesitation around this matter?

Especially if it has "no impact"...?

What "impact" could it possibly have, given the fact that the Prospectus states on page 77, that the BSE is looking to invest 20 million lei this year, in order to "build/acquire a new headquarters"?