The Rasdaq, kept alive for 18 years, using the same argument: minority shareholders

Several investors have notified the Financial Oversight Authority (ASF) about the fact that the law on the shut down of the Rasdaq, which was recently passed, contains "flaws", which allow issuers to avoid fulfilling their obligations to the minority shareholders, according to sources present yesterday at the debate of the draft regulation concerning the bylaws of the Rasdaq market.

According to the law concerning the Rasdaq, issuers should decide whether they are going to initiate the action towards the admission for trading on a regulated market or on an alternative trading system (ATS), within four months, in the General Shareholder Meetings, and within a year, the Rasdaq market would cease to exist.

The participants in the debate have raised the issue of companies that can choose to get listed on the ATS, from which they can get delisted without any "penalty", even though the law passed in the Parliament stipulates that the company has to grant shareholders the right to make an exit.

"The law is very badly formulated, it has lots of flaws when it comes to the protection of minority shareholders", market sources told us, and they added: "I think it's too late to make any interventions in regard to that law. The ASF is trying to see if there is anything to salvage of that law, through the draft regulation, in order to eliminate the loopholes. But the ASF will only be able to do very little in that regard".

MAKE, the president of the "BURSA" press group, considers that the flaws alleged by the participants in the debate are "nitpicking" and represent one and the same version of the argument that has led to the creation of the illegal Rasdaq market and the one that has caused it to be kept around for 18 years, specifically the protection of minority shareholders, by allowing them to trade their shares: "In 18 years, the minority shareholders did not actually trade their shares, and the listed companies did not see the need for their presence on the stock exchange, which they were listed on against their will.

The moment one company got delisted, the status of minority shareholders would not change in any way compared to what it was before. After all, they have one year available to sell their shares on the Rasdaq market. But who would buy them? Forcing the company to compensate the minority shareholders is a whole different matter, because supply and demand do not lead to trading.

Thus, like I said, yesterday's row is artificial and obstructionist".

Some people are disappointed by the lack of reaction of the representatives of the Bucharest Stock Exchange to the law concerning the Rasdaq: "These problems impact the stock market, by harming the way it is perceived by investors. They want to create an ATS, Aero, but how are they going to attract investors, when there are problems in dismantling the Rasdaq?"

Investors have also found issues within the law pertaining to the evaluations that have to be done to determine the exit price for investors, the manner of payment and the confirmation of the payments made to shareholders.

The Association of Stock Market Investors (AIPC) recently warned that the law which dismantles the Rasdaq market does not fully cover all the situations created by the change of the legal status of the shares traded on the RASDAQ market and that the ambiguous provisions of the law can seriously affect the activity of the issuers.