Constitutional Court finds law that exempts state companies from corporate governance regulations unconstitutional

Anca Alexe | 13/02/2018 | 16:59

The Constitutional Court of Romania (CCR) found unconstitutional the law that aimed to remove the corporate governance requirement for state companies.

The National Liberal Party (PNL) notified CCR in December about this proposed law, claiming that it would lead to the total politicisation of the management in state-run companies.

In December, the parliament passed the law which stated that around 100 state companies would be exempt from the legislation regarding corporate governance – in other words, the managers could be selected using political criteria.

Originally, the exception was meant to be applied only to a few companies, but by June of last year deputies added a long list of companies that would not be required to have professional management.

The president of CCR, Valer Dorneanu, said at the end of today’s session that the law was declared unconstitutional “mainly due to the breach of the bicameralism principle” as several amendments were done without the consultation of both parliamentary chambers, and also due to the fact that the law includes an unconstitutional text according to which the government can add as many companies as it wants to the list of companies exempt from the provision of corporate governance law.

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