Franklin Templeton International Services S.A. R.L, as administrator of alternative investment fund and sole administrator (“Fund Administrator”) of Fondul Proprietatea S.A. (“The Fund”), expresses its extreme disappointment at the change of the members of the board of directors of Salrom. The mandate of the new board will start on 1 October 2021. The stability and soundness of state-owned companies, as well as future development of these companies are of paramount importance for the Romanian economy and their success is a direct result of the quality of people appointed in the key oversight and managerial positions.
Fondul Proprietatea considers that this decision risks harming the company and jeopardizes important projects, such as the listing of Salrom on the stock exchange and the evaluation of the options regarding the exploitation of the graphite deposits in Gorj. In fact, the people appointed now by the majority shareholder in Salrom’s board of directors are none other than those who held these positions in 2020, a year in which Salrom’s profit fell almost seven times and in which operating revenues fell by 36%. It is a legitimate question whether these are the right people to contribute to the listing of the company or to make the best decisions regarding the exploitation of the graphite deposits, a vital resource for the global energy transition.
Johan Meyer, CEO of Franklin Templeton Bucharest and Portfolio Manager of Fondul Proprietatea said: “Fondul Proprietatea has been sounding the alarm for many years and has always stated that for the economic development of Romanian state-owned companies, transparency, continuity, and professionalism are needed. We do not see these conditions are met by the new composition of the Salrom board. In our view the members who were changed from the board had the necessary qualities to develop a sustainable investment program for Salrom, met the corporate governance criteria that the Romanian state has assumed, and could ensure the necessary stability to achieve the objectives of listing the company on the stock exchange and of development of Salrom. It is imperative that state owned companies stop being treated like political footballs, that board and management teams are selected according to corporate governance principles taking into consideration professionalism and expertise and that they are evaluated based on results delivered for the company and its stakeholders.”
Fondul Proprietatea continues to support Salrom’s current board of directors and management based on their demonstrated business acumen through the introduction efficiency measures at the company level and the initiation of investment projects that would support long term growth for the company. The investment projects, if commercially viable, should be carried out by the company as it means more investments that stand to benefit all stakeholders: employees, local communities, and shareholders.