Franklin Templeton Investment Management Limited, the investment manager of Fondul Proprietatea says the fund will go to court against the recent Romgaz decision to donate EUR 93 million to the state budget. Romgaz's shareholders decided on their November 30 meeting to make the donation to the state, which is the main shareholder in the gas company.

The Proprietatea Fund, which holds 15 percent of the Romgaz's shares, voted against the decision. “We understand the Romanian state's need to finance the budget deficit, but such decisions need to be made with a long term perspective. As the donation has already been supported by the Economy Ministry, we anticipate negative effects over the Romania investment environment and we believe even Romania's country rating can be affected,” said Mark Mobius, executive president of Templeton Emerging Markets Group.

The Franklin Templeton representative added that the measure was arbitrary and unfair and against the company's interest, also affecting the local capital market, as Romgaz is listed on the Bucharest Stock Exchange.  The Fund had offered an alternative solution to the state – a special dividend which would have led to an equal treatment for all shareholders, according to Franklin Templeton.

Investment fund Fondul Proprietatea will be listed on the Bucharest Stock Exchange on January 25 next year.  Fondul Proprietatea was set up in 2005 to compensate Romanians whose properties were confiscated during communism. Romanian Finance Ministry holds 52.84 percent of the fund’s shares, while the remainder is distributed among private stockholders.

The fund’s portfolio includes 83 companies, out of which 29 listed and 54 unlisted. The most important five companies are Petrom, Hidroelectrica, Romgaz, the National Airports Company and Nuclearelectrica.

editor@romania-insider.com