The foreclosure of the stocks owned by the AVAS, a difficult process

The liquidators of "Dobra, Coşoreanu& Dobra" said that they have attached four other blocks of shares owned by the AVAS located at the Central Depository, and they are preparing to put them up for sale on the Bucharest Stock Exchange, just like they did with the stakes that the AVAS had in "Casstil" Bucureşti (CAST), "Mercur" Craiova (MRDO), "Agrana România" (BETA) and "Biofarm" Bucureşti (BIO).

This time, the court appointed liquidators are targeting the stocks that the state owns in "Ameropa Grains" Constanţa (CCRL), "Construcţii Feroviare" Craiova (CFED), "Ceprohart" Brăila (CPHA) and "Horticola" Bucureşti (HOLS), claiming that they are willing to go even further to recoup the amount of 8 million lei, even though the Romanian National Securities Commission has suspended the trades involving the shares of the first "batch" of companies.

Iulian Coşoreanu, the liquidator who handled the foreclosure of the AVAS, called the action of the Romanian National Securities Commission (CNVM) as an abuse, and warned that he would do everything in his power to hold the Commission responsible if the court will allow him to proceed with the liquidation.

In an interview he granted to our newspaper yesterday, he said the following: "Nowadays, the thing that the AVAS is the most worried about is that the sale of the blocks of shares it owns in companies listed on the stock exchange will create a precedent. We have put the shares owned up for sale because we didn"t want to become part of the list of people who are waiting to receive money from the AVAS, after receiving the permission to foreclose on the Authority".

The list of those who are waiting for money from the AVAS following the foreclosure of the institution numbers about 1,130 people, with claims amounting to 251.2 million lei".

According to Mr. Coşoreanu, about 90% of the proceeds of the sale would go back to the state budget, representing the unpaid taxes of "Proed" Bucharest.

• Controversy on the issue of the true ownership of the shares

Sources from within the Romanian National Securities Commission who did not wish to be named, claim, however, that there are problems surrounding the listing of the blocks of shares of the AVAS for listed companies, because the state is the owner of the shares, whereas the AVAS is just the Authority for State Assets Recovery, a third party.

However, the court appointed liquidator claims that AVAS has possession of the shares, which also grants the right of ownership over them, which means that its assets can be put up for sale. Moreover, Iulian Coşoreanu is complaining that the Romanian National Securities Commission has substituted the court, by blocking the sale of the shares, even though the court has rejected the requests for suspension and the annulment of the foreclosure, submitted by the legal team of the AVAS.

The court appointed liquidators have requested the Romanian National Securities Commission to provide the legal grounds on which it suspended the transactions and the settlement of those that are about to be completed.

It has yet to receive a reply so far.

Mr. Coşoreanu said: "We have urged the Commission to immediately notify us of the grounds on which it based its statements that the operations which were carried out did not meet the legal requirements and the reasons for suspending the settlement of the two trades with shares of MRDO and BIO. From my point of view, the Romanian National Securities Commission has committed an abuse in its decision to suspend the settlement of the trades we did as well as preventing us from making any new ones, especially since it has mentioned that it was doing this taking into account the legal actions of the AVAS, even though the CNVM is not a court of law."

We have yet to receive an opinion from the AVAS in this matter, even though we contacted it with a request for information on this case. The representatives of the AVAS told us that the person of their legal department, who is handling this case, is on holiday and won"t be back until next week.

So that"s it!

If they"re on holiday, what can you do?!

• The AVAS does not own the shares which were foreclosed

AVAS is the acronym for the Authority for State Assets Recovery, which had its operating rules drawn up over the course of eight years (1998-2006).

As illustrated by its name, the owner of the assets managed by the AVAS is the government, meaning that the "possession" of the assets of the state would not allow their foreclosure, if the AVAS were to be foreclosed itself.

One more note: in fact, the shares of the companies which are part of the AVAS portfolio, which are listed on the Bucharest Stock Exchange, are not even in the possession of the AVAS; rather they are stored with the Central Depository.

The AVAS does not even have one share in its offices, and the deed of ownership of the shares belongs to the state.

This is why we think that the legal demonstration made by the court appointed liquidator is strenuous.