The uncertainty surrounding the listing of the Property Fund onthe Bucharest Stock Exchange has allowed foreign investment fundsto accumulate significant stakes in one of the richest companies inthe entire economy at a much lower price than the real value.
"There are funds who like this uncertainty because it allowsthem to buy cheap shares in the Fund," said Dan Paul, chairman ofthe Association of Brokers and a shareholder of the Fund.
Four foreign investment funds, among which Swedish East CapitalSpecial Opportunities, US-based Cartesian and UK's Coneglen, ownabout 6% in the Fund together now. The Romanian state holds themajority stake, 59%.
The shares have been selling via classified ads or throughbrokers on the Romanian market for almost two years; thetransactions are hardly transparent and are not supervised.Property transfer is registered with the Central Depositarylater.
The shareholders of the Property Fund initially agreed with thetrading of the Fund's shares via the OTC system launched by theAssociation of Brokers, but later changed their minds. Meanwhile,brokerage firm Wood&Co listed derivatives with Property Fund'sshares as the underlying asset on the Vienna Stock Exchange,providing a price for these shares for the first time.
The delays in the floatation of the Property Fund have allowedforeign funds to buy shares at bargain prices, thus giving theFinance Ministry some time to fix the problem of damages to be paidthrough the National Authority for Property Restitution (ANRP).
Alexandru Paunescu, chairman of the Property Fund's SupervisoryBoard said in November 2007 that "if the Fund is not listed by 31stof December 2008, I will stop being chairman." All the others whocame after him in this position made public statements about theimminent floatation of the Fund on Stock Exchange. However, theFund has not been listed yet.
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