Victims Of Romanian Communist Nationalization To Receive Only Shares As Compensation

People whose property was nationalized currently have the right to cash compensation, up to a maximum 500,000 lei (EUR1=RON4.3688). If the rightful compensation is higher than this amount, the former owners are entitled to shares in Fondul Proprietatea.

In the ordinance's motivation, the Government says compensation had been previously awarded in cash since Fondul Proprietatea was not fully functional and converting the money to shares would have increased the delay until the former owners received the compensation.

"Since the legal framework has been improved, with the adoption of normative acts and the signing of the administrative documents necessary to ensure the running of SC Fondul Proprietatea SA, and given the current economic context, marked by budget constraints, compensation provided by Law no. 247/2005 should be awarded only as shares in SC Fondul Proprietatea SA," says the motivation.

Right now, financing for the compensation program is provided by dividends granted by Fondul Proprietatea for shares owned by the Romanian state, and from the state budget.

Fondul Proprietatea was set up in 2005 to compensate Romanians whose properties were confiscated during the Communist regime. The fund selected Franklin Templeton as administrator with a view of listing its shares in Bucharest. The Romanian Finance Ministry holds 56.08% of Fondul Proprietatea's shares, while the remaining shares are distributed among private stockholders. The fund owns shares in 99 companies, including Transgaz, Transelectrica, Alro, Romgaz and several power distributors.

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