Romanian Privatization Authority To Reclaim Majority Stake In Two Companies

The Romanian state sold in 1999 the 91.3% stake held in the company Alimentatie Publica to businessman Constantin Cuciureanu, who vowed to give a 3,624 lei (EUR1=RON3.7376; average exchange rate in 1999 – EUR1 = RON1.6296) down payment, representing 20% of the stake price, and to pay the difference, of some RON14,500 in five yearly installments, plus the interest covering inflation, added with two percentage points.

"The investor failed to pay the last two installments, worth a total RON5,797, thus AVAS initiated foreclosure against the company, starting with 2004, to recover the sums due, later freezing the accounts of the debtor," according to data supplied by AVAS for MEDIAFAX.

AVAS terminated the acquisition contract, retained the sums paid and initiated procedures to regain shareholder status, as well as to force the buyer to pay damages worth RON30,239.

At the same time, the court will set other penalties paid by the businessman, in the form of sanction s, the dividends collected in the previous years and foreclosure expenses.

Cuciureanu, manager of several firms in Botosani, was indicted in 2005 by anticorruption prosecutors. He was under investigation for the use of loans in purposes other than the ones the loans were granted for, continuous bribery, three counts of accessory to illegal subsidy grant and abuse of office against public interests in the purpose of obtaining undue material gain, according to information supplied in Spring 2005 by the former National Anticorruption Prosecution Office.

Between 2002 and 2003, the firms managed by Cuciureanu allegedly received bank loans worth over RON2.7 million, with data indicating that the money was embezzled.

As for Textila Unirea, AVAS terminated the privatization contract concluded in 1995 with the Association of Employees. The buyer gave a down payment of RON54,530, representing 20% of the stake price, and vowed to pay the RON218,120 difference in ten installments, between 1996 and 2005.

"AVAS management in November 2007 decided to begin the dissolution and liquidation of several companies in the institution’s debt, including Textila Unirea Bucharest, due to their insolvency," said AVAS data.

The buyer failed to pay the last two installments, worth a total RON63,618, thus AVAS terminated the privatization contract, through which it had sold a 70% stake in the company, and initiated procedures forcing the buyer to pay damages, plus other penalties, dividends and foreclosure expenses, as the total value will be set by the court.

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