English
Reporter: What is the current situation of Bucur Obor?
Laurenţiu Postovaru: The management of Bucur Obor is using a ruling rendered in a criminal case concerning the thefts of shares of 1998 which is impossible to implement (ed. note: the court has forced the Depository to re-register in the shareholder registry of Bucur Obor the ones whose shares were stolen in 1998-1999), to basically disqualify the General Shareholder Meeting. The fact that it is impossible to implement that ruling was acknowledged by the ASF as well as by the Central Depository. The ASF still has means available to correct the situation that was created, it also has the legal means to intervene in that situation to protect investors, but it hasn't made a priority out of doing that so far. The ruling in question mentions over 40 companies that are in a similar situation - the SIFs, Alro Slatina, etc - where it was decided to cancel the trades. The directors in question did not use the ruling in question in ill-faith to obstruct their shareholders and to keep their positions and salaries. They have complied with he law and have held the General Shareholder Meetings, in spite of all the suspicions concerning an insignificant percentage of the shareholder structure. On the other hand, at Bucur Obor, the directors refuse to even hold the General Shareholder Meeting for the approval of the balance sheet, which they are required by law to do. Imagine what it would be like if by using this ruling in a similar manner, other Boards of Directors deadlocked tens of companies listed on the BSE?
My goal in itself isn't to replace X or Y, but instead to vote for a competitive Board of Directors. The current directors benefited from the "'boom'' of 2007 and from the fact that Bucur Obor capitalized the profits. In reality, the management is extremely bad, the company's profits are mostly generated from the cash held in the bank, while the operating profit is in freefall. To say nothing of the fact that there are suspicions of fraud. Which is why, starting with the year 2012, the General Shareholder Meeting has no longer granted them a discharge, for that reason.
The rights of the shareholders whose shares were stolen must be restored, no one is arguing that point, but that fraud shouldn't freeze a company dead in its tracks. I don't think there is any other country in the world where the courts issue two conflicting rulings, one which says that the General Shareholder Meeting may not be held, while the other requires the company to hold it. I think that a minimum degree of involvement from the ASF, since we are talking about a public company, would have helped the judges see things more clearly.
Lawyers tell me that in cases like this, I have to file a criminal complaint against the directors. I am seriously considering this, even though the chances of something like this happening are slim. It won't make me any happier if Gelu Manea (ed. note: the CEO of Bucur Obor) goes to jail, if by the time he does he will have wrecked all of the assets of Bucur Obor.
Reporter: Still, you've summoned the General Shareholder Meeting again.
Laurenţiu Postovaru: Based on the same ruling, I've once again summoned the General Shareholder Meeting, this time for September 19th. This time I've specified in the notice to attend that the shareholders whose shares were stolen may participate in the General Shareholder Meeting as well.
Reporter: And how are the votes going to be counted?
Laurenţiu Postovaru: When the General Shareholder Meeting begins, theoretically, I, who hold 50%, could, let's say, abstain from voting for the number of votes of the shareholders who lost their shares present at the meeting.
Reporter: Seems absurd.
Laurenţiu Postovaru: This is the second thing that is absurd. The first would be if the General Shareholder Meeting weren't held. To say the latter is absurd would be an understatement. But when things are absurd there is no other way but to act absurdly as well.
But in fact, it's not really that absurd. After all, the agenda of the General Shareholder Meeting includes the election of the Board members. If I assign the voting rights to those people, they can vote and their rights won't be affected. I will lose some votes of my own, but stopping the decline of the company is more important than those votes and most importantly, it benefits all the shareholders, including those whose shares were stolen.
It's not normal for a company to operate with only two board members, who hide behind their alleged concern for the shareholders who were harmed through the theft of their shares. The other shareholders are entitled to protection as well, to benefits, and to the right to elect the board members and to control them and the business.
Reporter: Did you talk to the ASF?
Laurenţiu Postovaru: I went in for an audience. Legal advisors from the ASF were present. In a way their hands are tied too, because of the rulings of the court, which are conflicting. But courts aside, the law states that the General Shareholder Meeting must be called at the request of a shareholder with a stake of more than 5% of the company. I own 50%. The ASF would do well to get involved. I hope that this public action will get things moving over there as well. I don't think that Mr. Mişu Negriţoiu or Mircea Ursache, who are big names in finance, would tacitly accept such a situation. Unless I am mistaken, Bucur Obor is on the list of companies that must be moved to the Regulated Market, and the finalizing of the Rasdaq status is a priority for the management of the ASF. It could be a good company for the BSE and I don't think that the BSE would accept this kind of anti-corporate practices. In 2013, I tried to change the management amicably. They refused, their mandate had just begun. I cut their salaries. Gelu Manea was being paid over 18,000 Euros for his executive position and for his seat on the Board of Directors. I think that was than the CEO of Petrom makes and at any rate definitely more than the president of the ASF! He set this salary for himself in 2012, in a General Shareholder Meeting which I did not attend. In the Extraordinary General Shareholder Meeting of 2013 several shareholders have asked for the reduction of these ridiculous salaries, and the General Shareholder Meeting cut them by approximately 75%. However, if one looks at the balance sheets of 2012, 2013 and 2014 (for the semester), that cut is not discernable in the salaries expenses account.
Reporter: If this General Shareholder Meeting is not held this time either, what do you plan to do?
Laurenţiu Postovaru: I will resort to lawyers, other lawsuits, another summoning of the General Shareholder Meeting. Perhaps come criminal complaints concerning fraud in management. Civil lawsuits take a long time, it wouldn't be fair for the limitation period to expire. There are many other shareholders who are suggesting this or who are asking me to do it and I will be the one to do it because not everybody can bear the cost of such a war.
Reporter: Can't you turn against the ruling of the court?
Laurenţiu Postovaru: An irrevocable and final criminal ruling cannot be changed. It is a ruling which is not binding to Bucur Obor, nor to me or to Gelu Manea. It only concerns the shareholders who lost shares and those who stole them. This is what was on trial in that lawsuit. But the court issued a ruling on the civil side of the lawsuit as well and decided to cancel the trades. The criminal court probably did not have much stock market experience.
The canceling of a trade is done by returning the shares, but also by transferring the money to the buyer. To say nothing of the fact that most of those who bought shares at the time no longer have them and will oppose the foreclosure, because they were not parties in the lawsuit, and they have to be presumed as having bought the shares in good faith. This incompleteness of the criminal ruling poses problems to the Central Depository and the ASF alike, and most importantly, to the victims, who can't even enjoy their rights 15 years later.
Reporter: What would you have wanted for the company?
Laurenţiu Postovaru: First of all, I wish there wasn't so much stealing going on. There are huge amounts that are spent without justification, on repairs, for instance, as proven by the financial statements filed with the Tax Administration, the salaries are also very high.
According to the report of the board members, the company is profitable. And how could it not be, when it hasn't paid dividends in years. It's natural that the money that wasn't accumulated is accruing interest and creating a financial profit. The real profit of the company, the operating one, has been in freefall for years. Bucur Obor, has over 6,000 square meters that aren't rented. There are many sublet spaces, even though their contracts don't allow subletting. However, in Bucur the contracts with a rent of 3 dollars per square meter for twenty years are still in effect. Lots of friends of Gelu Manea are paying 3 dollars per square meter in rent to Bucur Obor and they have sublet to others for 50, 80, 100 Euros per square meter.
The current Board of Directors doesn't manage, but it is good at getting involved in lawsuits. They have over 100 ongoing lawsuits.
Meanwhile, the retail location is losing its "goodwill". You can very well have a huge retail location, but if you don't do anything to attract customers, it's for naught. When the leased spaces decrease, that means fewer customers. Now they are working on another way to rip-off the company, by signing a contract of about 1 million Euros, for the ''improvement'' of Bucur Obor. An utterly stupid idea, to try and turn Bucur Obor into a Mall, and making a commercial center that was initially thought out as a wholesaler like "Europa" or "Dragonul Roşu", with many specific features directed at the small retailers and to pit it against the Malls of Bucharest, a city which will soon become saturated in that regard, and especially as Florin Pogonaru has announced that he would begin the construction of another mall himself on the plot of land of the former Prodplast, near Bucur Obor. But in this particular situation, I am not worried, part of the loss will be recouped both from the directors and from the consulting firm, I notified them prior to the call for tenders that the General Shareholder Meeting has not approved the project and that they are fully responsible for anything they intend to do.
Reporter: How much money have you invested in Bucur Obor in total?
Laurenţiu Postovaru: I couldn't tell. As an estimate, out the earnings of Amadeus, the company I used to sell household appliances starting in 1991, I have invested approximately 3 quarters of the profits in Bucur shares and only a quarter in my retail spaces. I now live off my retail spaces. 1.8 million Euros I spent in December, for the 10% block of shares owned by Broadhurst. It is true that in 1998-1999 stocks were inexpensive. But let's not forget that at the time, the money I paid was significant, even though it may seem small now.
Had I used that money to buy other things - land, other retail areas, it would have multiplied. Bucur is worth very little now. The company has major losses, it's true that the numbers show a profit, but that is due to the financial profit. Had it paid out dividends, the company would have been in the red over the last few years. Because there is a crisis, obviously, retailers can't pay the rents they used to pay in 2007-2008.
Reporter: If the Depository hasn't operated any change in the shareholder structure, because it couldn't, then you have the ownership all of all your shares. You should have been able to vote.
Laurenţiu Postovaru: I own 50%. Yes, I can vote with all my shares, but where am I going to vote, out in the street? The law says that the Board of Directors should call the General Shareholder Meeting, and they summon it.
Reporter: Do you think that there is anybody to blame for this?
Laurenţiu Postovaru: Aside from Gelu Manea? The one bearing the biggest blame is Mr. Gheorghe Pistol (a member of the Board of Directors), because he backs Gelu Manea and because he does not fully realize what would have happened to him in a normal country, in a normal stock market, with a normal legal system, which renders two rulings, one which says "hold it" and the other says "don't hold it" (ed. note: the General Shareholder Meeting).
Gheorghe Pistol is a former secretary of the Court of Accounts and a dean of the Finance Faculty of the Spiru Haret University. He is an educated man. He should act like a man that has a good head on his shoulders. I can't understand why he is acting like this, except through the financial benefits he is getting.
The vacant seat on the Board of Directors has appeared following the resignation of Professor Aurelian Bondrea, Chancellor of the Spiru Haret University, where Mr. Pistol operates as well. I have explained the situation to him, he understood that his reputation and image could be harmed and he resigned right away, as he didn't want to associate with the actions of Gelu Manea.
That's not what happened to Mr. Pistol, unless, on the next Board of Directors, he will realize that he is on the edge and that being associated with the actions of the CEO could endanger his career and his image, both his own and that of the institutions that he is working with, but most of all will cast him in a negative light before the students of the Spiru Haret University.
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