The Proprietatea Fund enters the Mobius age

• Mark Mobius: We will make our own independent decisions

• The Proprietatea Fund is also getting ready to be listed on the London Stock Exchange

• Some of the shareholders criticize the plans of the state to keep control of the Fund

Mark Mobius, the head of Franklin Templeton, the company that will manage the Proprietatea Fund, yesterday said he will be free to make his own decisions concerning the management of the Fund, and the committee of representatives will only have oversight functions. "Based on our interpretation of the contract for the management of the fund, we can make our decisions independently, and the committee of representatives will not be involved in the day-to-day decisions that we will be making, but will instead have supervisory attributions", Mark Mobius said yesterday.

The election of the members of the Board of Directors caused a bit of an uproar in yesterday"s General Shareholder Meeting, with some shareholders claiming that the state is trying to maintain control of the Proprietatea Fund. Dan Paul, the chairman of the Association of Brokers and shareholder of the Fund, yesterday voted against the creation of the board of representatives and the election of its members, claiming that this body is on the edge of the law, because the law of companies that governs the functioning of the Proprietatea Fund does not have any provisions concerning this type of body. "The competences of the committee of representatives could occasionally overlap with those of the fund"s manager", Dan Paul warned. He added: "The committee can summon a general shareholder meeting and oversee the deals made by the manager involving the holdings of the fund. This committee essentially takes away some of the fund manager"s powers".

When asked about this matter, the representatives of Franklin Templeton have reaffirmed that the role of the committee of representatives is to monitor the activities of the administrator. "If we look at international practice, we can see that the existence of such a structure with a supervisory role is natural. The Committee of representatives is tasked with overseeing our activity and asking questions on why we made certain decisions", the representatives of Franklin Templeton said, thus implicitly ruling out the possibility of the committee of representatives controlling the decisions of the Proprietatea Fund in the future.

Corin Trandafir, the representative of the shareholders of Malaxa and Auschnit), Cristian Buşu (CFO of the Proprietatea Fund), Bogdan Drăgoi (secretary of state in the Ministry of Finance), Monica Maurer and Sorin Mândruţescu were elected on the committee of representatives of the Proprietatea Fund.

• The Proprietatea Fund could be listed on the London Stock Exchange

The listing of the Proprietatea Fund on the STOCK EXCHANGE COULF TAKE PLACE AT THE END OF 2011, PROVIDED THE FUND WILL UNDERGO A SERIES OF CHANGES OF ITS STRUCTURE, Greg Konieczny, Franklin Templeton Fund Manager For Romania said yesterday. One of these changes that will need to be implemented concern the voting system of the Proprietatea Fund, which currently does not offer all shareholders equal rights for their shares. International practice offers a number of votes equal to the number of shares owned, but the current voting system of the Proprietatea Fund allocates voting rights in proportion with the size of the stake of each shareholder, said Greg Konieczny.

Concerning the listing on the Bucharest Stock Exchange, the representatives of Franklin Templeton again expressed their hope that the Fund would be listed in the beginning of next year. "The prospectus needs to be submitted with the CNVM by December 22nd. The exact date for the listing however, would depend on the approvals that we are going to receive from the market regulator", Greg Konieczny said yesterday.

• A different net asset value, based on international standards

Greg Konieczny yesterday announced that the new value of the Fund"s net assets would be calculated starting with the end of September, according to international standards.

KPMG has calculated the Net Asset Value (NAV) of the Proprietatea Fund for the months of May, June and July, according to the information posted on the website of the Proprietatea Fund.

According to KPMG figures, at the end of July, the net assets of the Fund were worth 14.64 billion lei (around 3.48 billion Euros), down slightly compared to the months of June (14.84 billion lei) and May (14.86 billion lei).

Based on these calculations, one share of the Proprietatea Fund would be worth 1,0283 lei at the end of July.

The NAV was calculated according to Regulation no. 4/2010 of the Romanian National Securities Commission (CNVM), which provides that the NAV of the Proprietatea Fund must be determined by subtracting the aggregated amount of the company"s debts and deferred income from the total value of the company"s assets.

"KPMG has calculated the NAV in compliance with the standards of the Romanian National Securities Commission (CNVM), which is why it is hard to challenge those figures. However, at the end of September, we will publish a value of the NAV calculated on the basis of international standards, which will be different from the one calculated by KPMG. It is very important that the difference between the domestic and the international methods for determining the NAV is understood, as well as the relevance that the NAV has in determining the price per share", Mark Mobius said yesterday.