Romania's Transport Ministry has fired the entire board of directors at state-owned airline Tarom and named a new management team.

The board was led by Romanian banker Dan Pascariu, whose replacement will be voted in the first session of the new board.

The new board is currently made of Dante Stein, counsellor of the Romanian Prime Minister and son of former AutoItalia owner Herbert Stein, Manuel Donescu, state secretary within the Transport ministry, Florin Luca, banking strategy consultant, Bogdan Speteanu, general manager of BCR Leasing and Razvan Filipescu, president of the National Tourism Authority.

The Ministry's decision to change the entire board was, according to Romanian media, fuelled by the dispute with the company's administrative management on whether to prolong the mandate of private manager Christian Heinzmann.

The manager's mandate had been shortened from four years to just a year, and is due to end on November 19.

The change had been supported by Pascariu and the rest of the previous board, made up of Valentin Macec, Ciprian Ladunca, Marius Ghenea, Dumitru Prunariu, and Nicolae Demetriade. The latter resigned two weeks ago.

The Transport Ministry says the old board did not respect its statute and its mandate by shortening the private manager's mandate, and that the statements from board members prejudiced Tarom's image.

The Ministry representative, spokesperson Teodora Trandafir, said the Ministry was not for or against extending Heinzmann's mandate and that the new board will decide after analyzing the manager's activity and results.

The situation at Tarom, where the previous board was planning to bring new private managers, has been long debated in the local media.

Even Transport Minister Ramona Manescu said it was a 'bizarre' situation, and has pointed to Pascariu as responsible for the scandal.

Pascariu is also president of the board at UniCredit Tiriac Bank in Romania.

Belgian Heinzmann is the second private manager appointed at the helm of Tarom, after the company became the first state-owned firm to appoint private management, as part of an agreement with international financiers from the International Monetary Fund (IMF).

Heinzmann replaced Heinrich Vystoupil, who gave up his position shortly after starting.

Tarom's losses in the first four months of 2013 reached over EUR 15 million, some EUR 6.8 million more than foreseen in the management plan.

Meanwhile, losses for the first quarter were some EUR 11.2 million, 24 percent less than in Q1 2012.

A secondary public offering was also planned for Tarom sometime this year.

editor@romania-insider.com