Fondul Proprietatea: Hidroelectrica needs a board appointed on a four-year mandate

State-owned energy producer Hidroelectrica needs a board appointed on a four-year mandate, says Greg Konieczny, CEO and portfolio manager of Fondul Proprietatea, following the proposals made by the Ministry of Energy on 31 March 2017 to set up another interim Board for a period of four months at Hidroelectrica.

“We are disappointed that the Ministry of Energy chose to propose yet another interim Board at Hidroelectrica. What Hidroelectrica needs, as the most valuable Romanian company, is stability and predictability, as well as top professionals on its Board. The current proposal does not observe the corporate governance provisions of Law 111/2016, which establishes professional criteria and transparent procedures for the selection of members of the Supervisory Board in state-owned companies. We believe that another interim Board instead of a longer-term Board appointed according to Law 111/2016 will only prolong the instability and unpredictability for the company for another four months, thus putting the company at greater risk. A huge success story risks being jeopardized by short term visions, “ says Konieczny.

According to him, the maintenance of the interim state of affairs at Hidroelectrica may severely hinder and delay its Initial Public Offering (IPO) efforts, resulting in the the diminishment of the company’s value during listing and making investors less confident to invest in it.

The Romanian citizen/ tax payer might be also prejudiced, says Konieczny.

“We would like to reiterate that the 84 candidates that participated in the previous selection process could provide six strong candidates on a four-year mandate for the Board of Hidroelectrica,” concludes Fondul Proprietatea.