Property Fund shareholder asks the state for nationalisation

American investment fund Cartesian, which bought 2.85% in the Property Fund, is now calling for discussions over the possibility for the Ministry of Finance to nationalise the shares of minority private owners of the Fund. The Cartesian Fund bought the shares at a discount from those who have been compensated by the Romanian state for properties seized by the communist regime. "Nationalisation of the Property Fund is one of the scenarios considered by the major private shareholders. In this case, the Finance Ministry would buy back the 4.6 billion shares held by the private shareholders. This scenario could explain why a reduction in the Fund's share capital was proposed," Nicolae Ivan, former president and general manager of the Property Fund in 2006, told ZF. He represents an American investment vehicle, Cartesian, which took over 2.85% of the Fund in 2008. However, Mihai Ursache, a member of the Fund's Supervisory Board, says payment in cash is out of the question at this time, due to the budget deficit. If the state were to buy back shares of the Property Fund, this would offer a 7-800% yield to last-minute buyers, who bought shares through ads in newspapers at 7% of their nominal value, if the price were set based on the last book value, of 0.7 RON per share. "This is an impossible scenario to put in place from a constitutional as well as a financial point of view. Any sum paid by the Romanian state has an impact on the budget deficit," says Mihai Ursache, a member with the Supervisory Board of the Property Fund.