FP: The new powers of the Energy ministry shouldn’t lead to renationalization of companies

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The government recent Ordinance legalizing Ministry of Energy’s buy back of state-owned enterprises (SOE) shares should lead to the creation of a sovereign independent investment fund in order to ensure the independence from political decision within the companies’ management, Fondul Proprietatea’s manager, Greg Konieczny, told energynomics.ro.

„We do think that the Romanian state should have a capacity to behave as any other investor in the market and be able to setup new companies as well as subscribe to any capital increases in state controlled companies,” says Konieczny.

„At the same time, we think that there is a need to bring accountability for any such actions. It is important to make sure that the state control over commercial enterprises is going to be reduced through further privatizations and IPOs. We have to make sure that the new powers of the government are not going to lead to re-nationalization of companies or industries. This would be the most unwelcomed outcome,” says Greg Konieczny.

He adds on that „in order to avoid such risk and also to improve the quality and returns of SOEs it is worth considering an establishment of a Sovereign Fund that would take over the ownership functions over all state participation in companies.”

The state has in mind the creation of an investment fund together with Rompetrol, however, that will not be a general sovereign fund with investments in SOEs, but a specific one with targeted investments.

„The main objective of such fund should be to maximize the value of companies in its portfolio and to execute privatizations/IPO processes. The management of such fund should be totally independent. As a result the ministries (who right now perform ownership functions) would have more time to focus on developing long term strategies for each sector of the economy. Such funds already exist in a number of EU countries, also with Norway being one of the most relevant examples”, Konieczny added.

The government issued last week a new ordinnace that allows The Ministry of Energy to „consolidate its position” into companies that are already owned by the state, via shares buy-back.

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Bogdan Tudorache

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