The Romanian National Securities Commission suspends the deals involving the shares owned by AVAS

• The settlement of the trades of shares of "Biofarm" and "Mercur" Craiova, suspended for two weeks

The capital market watchdog, has suspended the execution on the BSE of the deals involving the shares that the Romanian state, through the AVAS, owns in "Biofarm" (BIO) Bucharest, "Agrana" România (BETA), "Mercur" Craiova (MRDO) and "Casstil" Bucureşti (CAST).

The stakes of in questiojn has been put up for sale on the special deals tier of the BSE, by the judicial executors of "Dobra, Coşoreanu & Dobra", through brokerage firm "Oltenia Grup Invest".

The ordinances of the Commission, which, according to sources, were passe after lengthy debates, come aftert he brokers have been placing sale orders for the blocks of shares of the AVAS, and succeeded in selling 6,000 shares of MRDO and 7.24 million shares of BIO.

However, the Commission has decided to suspend for two weeks the settlement of these trades, while at the same time prohibiting the sale of the shares for the moment.

The ordinances of the Romanian National Securities Commission have mentioned several complaints of the AVAS which indicate "potential violations of regulations specific to the capital market and of the legislation which concerns the privatization process". The ordinances state that, one of the goals of suspending the transactions, among others, is "to allow the verification of the compliance with the legislation in effect of the operations with the shares owned by the AVAS".

The "eye" of the Romanian National Securities Commission also turned on the BSE, because, according to some there is no legal framework to regulate the sale of the state"s blocks of shares, following the foreclosure of the AVAS, and the BSE shouldn"t have allowed the orders to be placed.

"The Code of the BSE says that the market participant (ed. note: the brokerage firm that intermediates the sale/buying of the shares) needs to receive the order from the owner of the shares".

"The judicial executor is not, however the owner of the shares, it is just the entity which forecloses on an institution of the state", sources which did not wish to be named.

Contacted by BURSA, the officials of the BSE said that they were not aware of the members of the Bucharest Stock Exchange having been summoned by the Romanian National Securities Commission to provide explanations.

"I can"t confirm, nor deny, the offers to sell the shares owned by the AVAS, but I am not aware of the members of the BSE having been summoned by the Commission", said Mr. Alin Barbu, director with the BSE.

Valentin Ionescu, the general manager of the BSE, said that the BSE has not been warned for allowing the trades with the shares of BIO and MRDO, but he did not provide us with an answer when asked whether he was called by the Romanian National Securities Commission to provide explanations.

The brokers that handled the sale of the shares of the AVAS could not be contacted.

Through the AVAS, the Romanian state owns 5.85 million shares in "Agrana" Romania (4.05% of the company), 31,773 shares in "Mercur", (2.68%), 11.4 million shares in "Biofarm" (1.04% of the company) and 56,465 shares in "Castill" (65.5%).

Two weeks ago, market sources that did not wish to be named were saying that the month of August is an "optimal" period for the foreclosure of the AVAS, since it coincides with the court holiday.

"Even if the Authority were to challenge the foreclosure, it would take a while before it got an answer", the aforementioned sources were saying at the time.